LG Energy Solution Signs Energy Storage Supply Agreement

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Written by Danny Levin, Deputy Editor for IIR News Intelligence (Sugar Land, Texas)

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Summary

As it aims to be a major player in the growing energy-storage market, LG Energy Solution signed a multi-year agreement to supply battery energy storage systems for utility-scale projects in the U.S. Industrial Info is tracking a directly related manufacturing project from LG as well as BESS-generation projects with offtaker Hanwha QCells as the EPC provider.

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LG Energy Solution-QCells Agreement

LG Energy Solution would provide Hanwha QCells with five gigawatt-hours (GWh) of lithium-ion battery energy storage systems (BESS) for the latter's utility-scale, engineering, procurement and construction (EPC) projects across the U.S. scheduled for completion between 2028 and 2030. Both companies are headquartered in South Korea.

"This partnership secures energy storage systems for Qcells that meet domestic content requirements, as LG Energy Solution's battery energy storage products are made in Michigan..." the companies said in a press release.

QCells' U.S. EPC Presence

Industrial Info is tracking several BESS-generation projects with the company as EPC provider, although none are currently being tracked with a completion date in the 2028-2030 timeframe.

Projects include two separate battery storage additions to be co-located at the under-construction Atlas solar plant in La Paz, Arizona, as well as standalone BESS installations in Pecos, Texas and Astoria, New York, respectively. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can read the related project reports.

LG Energy Solution's U.S. Energy Storage Manufacturing Ambitions

LG Energy Solution is currently manufacturing up to 16.5 GWh of lithium-iron-phosphate (LFP) batteries per year at the plant in Holland, Michigan, and is in the process of expanding the plant to 30 GWh by adding three production lines. Construction of the third line is expected to wrap up by the end of the year. LFP batteries do not employ nickel or cobalt, lowering costs. Subscribers can read a related project report and plant profile.

This comes as the company reported fourth-quarter and full-year 2025 earnings on January 28, providing updates on its efforts to become a leader in energy storage.

"In North America, ESS [energy storage systems] is expected to represent about half of total battery demand on the back of tech companies' investment in data centers and policy support including the maintenance of clean energy investment tax credit (ITC)," the company said in discussing its 2026 initiatives. "In particular, given that data centers require stable, long-term ESS projects, grid-scale ESS, which already accounts for 95% of ESS demand in the region, is expected to demonstrate strong growth this year."

LG Energy Solution aims for more than 60 GWh of global production capacity by the end of 2026, with more than 80% (50 GWh) expected to come from North America.

In the related conference call, Chief Executive Officer Chang-sil Lee discussed the company's footprint in the region. "Given that local production is critical in North America, we will utilize not only our wholly owned production sites in Holland and Lansing, Michigan, but also convert some EV [electric vehicle] lines to ESS lines at our JV [joint venture] sites with partners such as Stellantis and Honda to secure more than 50 GWh capacity without incurring significant costs."

In addition to the Holland plant, the Stellantis joint venture in Canada has already started operations and "should fully contribute to this year's performance."

He added the Lansing site, which LG purchased from previous joint-venture partner General Motors last year, should start mass production in the first half of the year. The Honda joint venture will also follow suit "once the size and timing of the conversion is finalized."

Subscribers can read more information on the Lansing and joint-venture plants.

Lee said the company plans to cut capital expenditures by more than 40% year-over-year in 2026 amid an ongoing slowdown in EV sales. "We will minimize new expansion investments and capital expenditures by maximizing the operational efficiency of existing assets," such as converting EV lines. "While we selectively execute investments that are directly linked to sales growth, we plan to significantly reduce the capex amount."

"We anticipate that 2026 will be a time when structural changes, such as the slowdown in the growth of the EV market and the rise in ESS demand, becomes a reality."

In a sign of the times, Ford Motor Company recently announced it created a new energy unit to manufacture LFP battery units for both commercial and residential applications. For more information, see January 29, 2026, article - Ford Picks Leader for New BESS-Manufacturing Unit.

Key Takeaways

• LG Energy Solution signed a supply agreement with Hanwha QCells for 5 gigawatt-hours of energy storage.
• New production lines at its plant in Holland, Michigan will support the agreement.
• The company plans to lower 2026 capex 40% year-over-year as it favors converting EV lines to energy-storage production.
• Targets more than 60 GWh of production, with more than 80% in North America, by year-end.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resource's Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).