Ultium Cells, the battery manufacturing joint venture between General Motors and LG Energy Solution, announced it is retooling part of its U.S. production to manufacture lithium iron phosphate batteries for energy storage systems, marking a strategic shift beyond electric vehicle supply.
The company is investing $70 million to convert production lines at its Spring Hill, Tennessee facility, with the transition expected to be completed and operational by the second quarter of 2026. The move reflects changing market dynamics, including slower than expected growth in electric vehicle demand and accelerating demand for grid-scale energy storage, particularly driven by artificial intelligence data centers and broader electrification needs.
Under the new plan, Ultium Cells will produce LFP battery cells designed specifically for energy storage systems. These cells will be supplied to LG Energy Solution Vertech, the company’s U.S. energy storage division, which integrates the batteries into large-scale storage solutions used for grid infrastructure and data center projects across North America.
The Spring Hill facility will become a key hub in LG Energy Solution’s expanding North American energy storage network, joining existing operations in Michigan and Ontario. By the end of 2026, multiple facilities across this network are expected to dedicate capacity to LFP battery production for stationary storage applications.
Energy storage systems play a growing role in stabilizing power grids, supporting renewable energy integration, and enabling faster deployment of infrastructure such as data centers. Compared to batteries used in electric vehicles, LFP chemistry offers lower costs and is better suited for stationary use cases where size and weight constraints are less critical.
As part of the transition, Ultium Cells is retooling manufacturing equipment and retraining its workforce. The company noted that approximately 700 employees who were previously furloughed are in the process of returning to support the new production line. At the same time, certain EV-focused battery production has been consolidated at the company’s Warren, Ohio facility.
The shift underscores Ultium Cells’ broader strategy to diversify its manufacturing capabilities and adapt to evolving battery market demands while maintaining its role in supporting both electric vehicle production and emerging energy storage applications.
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“Spring Hill is becoming a key hub in our North American ESS manufacturing footprint which has helped offset slower than expected EV demand. The explosive growth in energy storage diversifies our customer base and product portfolio and provides tangible benefits to American competitiveness in this decade and beyond.”
Bob Lee, President of LG Energy Solution North America
“This announcement marks Ultium Cells’ first major retooling of the Spring Hill process equipment and reflects the company’s continued evolution as a diversified battery cell manufacturer. By evolving production to meet changing market demands, Ultium Cells is reinforcing its long-term position as a key employer and technology leader in the U.S. battery cell sector.”
Injae Pahk, President and CEO of Ultium Cells
