LG-Honda joint venture begins ESS battery production at Ohio plant

Shift to storage batteries reflects slower EV demand

L-H Battery Company, the joint venture formed in 2023 between LG Energy Solution and Honda Motor, began mass production of lithium-ion cells for energy storage systems at its Jeffersonville, Ohio, plant on Thursday, the company confirmed.

The facility was originally designed to manufacture batteries for Honda’s planned electric vehicle lineup. But as EV sales growth slowed and changes in U.S. regulatory and policy environments increased uncertainty for automakers and battery manufacturers, the partners adjusted the factory’s production strategy, the joint venture said.

“Energy storage systems are an important future business for L-H Battery Company and will become a core business pillar along with the production of battery cells for hybrid-electric vehicles,” L-H Battery Company Chief Executive Officer Koo Ja-hoon said.

Chief Operating Officer Rick Riggle said the company has hired employees and begun production since the joint venture was established in 2023. “This start of mass production is significant because it goes beyond simply operating a plant and establishes a stable production base for our North American business,” Riggle said.

The cells will be supplied through LG Energy Solution Vertech, the South Korean company’s North American energy-storage system integration subsidiary. They are expected to be used in utility power grids as well as commercial, industrial and residential energy-storage systems across the United States.

The shift to storage batteries reflects broader industry trends. LG Energy Solution has been converting or adapting electric-vehicle battery facilities to produce storage batteries as manufacturers respond to slower EV growth. The company plans to operate five energy-storage battery manufacturing sites in North America: the L-H Battery plant in Ohio, facilities in Holland and Lansing, Mich., the NextStar Energy plant in Windsor, Ontario, and the Ultium Cells factory in Spring Hill, Tenn.

LG Energy Solution said it aims to secure more than 50 gigawatt-hours of annual energy-storage battery production capacity in North America by the end of 2026. BloombergNEF has projected that the U.S. energy-storage market could expand to 485 gigawatt-hours in 2030 and 976 gigawatt-hours in 2035.

Honda said in May that it would convert part of the joint venture’s electric-vehicle battery production lines to make batteries for hybrid vehicles. The company also said it would use the Ohio battery facilities for other applications as it restructures its North American vehicle and battery production network.

In March, Honda canceled plans to develop and launch three electric-vehicle models that had been scheduled for production in North America, citing changes in the business environment.

Demand for energy storage is rising as utilities add renewable-energy capacity and seek batteries that can store electricity when supply exceeds consumption. Artificial intelligence data centers are also increasing electricity demand and creating a need for additional power-generation, transmission and storage infrastructure. Energy-storage systems can help stabilize power grids by storing electricity during periods of low demand and releasing it when demand rises, the company said.

The joint venture’s revised production strategy allows the companies to use the plant for energy storage and hybrid vehicles while retaining the ability to respond if electric-vehicle demand recovers, according to the company.