From lithium to ESS: LG Energy Solution shores up its North American supply chain

[Financial News] LG Energy Solution is stepping up efforts to strengthen its North American supply chain, securing lithium, a key battery raw material, in both the United States and Canada. The move is aimed at meeting demand in the energy storage system (ESS) market, which is growing amid increasing uncertainty in the electric vehicle market, driven by the spread of artificial intelligence (AI) data centers and renewable energy. The company plans to expand its production capacity for lithium iron phosphate (LFP) batteries for ESS in North America to at least 50 GWh by year-end, building a supply chain that extends from raw-material sourcing to local production.
On the 26th, LG Energy Solution said it had recently signed a long-term supply agreement for lithium concentrate with Canadian lithium producer Elevra Lithium. Under the agreement, it will receive a total of 240,000 metric tons of lithium concentrate over four years starting at the end of this year. This amount can be converted into about 30,000 metric tons of lithium hydroxide and is enough to produce batteries for approximately 700,000 high-performance electric vehicles.
Last month, the company also signed a long-term supply agreement for lithium carbonate with U.S. lithium developer Smackover Lithium. It is scheduled to receive a total of 80,000 metric tons over 10 years starting in 2029, when Smackover Lithium is set to begin full-scale production. That volume is enough to produce batteries for about 1.8 million high-performance electric vehicles.
Lithium concentrate is refined to produce lithium carbonate and lithium hydroxide. Lithium carbonate is mainly used in LFP and ternary batteries, while lithium hydroxide is mainly used in high-performance, high-nickel ternary batteries. LG Energy Solution expects these agreements to expand its local raw-material sourcing base in North America and help it respond flexibly to changing demand in the electric vehicle and ESS markets.
Alongside securing raw materials, the company is also stepping up efforts to expand its production bases in North America. LG Energy Solution has secured five sites as North American ESS production hubs: three standalone facilities—the Lansing and Holland plants in Michigan and the NextStar Energy plant in Ontario, Canada—and two joint ventures, a plant in Ohio with Honda and a plant in Tennessee with General Motors (GM). Based on these facilities, it plans to increase its North American production capacity for LFP batteries for ESS to at least 50 GWh by the end of this year.
In particular, NextStar Energy, located in Windsor, Canada, began mass production of batteries for ESS last November. Linking Canadian lithium with local production facilities can strengthen the regional North American supply chain, from raw-material sourcing through battery production.
LG Energy Solution currently has a total of eight production facilities established and operating in North America. The company plans to expand the share of its ESS business alongside electric vehicles and pursue a transformation into a global energy platform company, leveraging its local production system.
A spokesperson for LG Energy Solution said, “These agreements have further enhanced the stability and flexibility of our raw-material supply chain.” The spokesperson added, “We will respond more proactively to the rapidly growing North American battery market and lead the market as a global energy platform company.” 
[email protected] Kim Dong-ho Reporter