On the Dash:
- Transitioning EV battery plants to energy storage production demonstrates alternative revenue streams amid slower EV demand.
- Recall of 700 workers signals GM and LG are actively scaling operations to meet energy storage needs, reflecting strong market demand.
- Dealers should monitor developments in lithium-iron phosphate battery production and energy storage adoption as potential opportunities for partnerships and infrastructure planning.
General Motors and battery partner LG Energy Solution are transforming a Tennessee electric-vehicle battery plant to produce batteries for energy storage systems, the companies announced Tuesday.
Through their joint venture, Ultium Cells, GM and LG will recall 700 laid-off workers to resume production in the second quarter of 2026. The workforce reductions at the Tennessee plant and another Ultium facility in Ohio earlier this year were driven by slower EV sales and are expected to continue through mid-2026.
Battery manufacturers are seeking ways to address excess EV battery capacity, and energy storage has emerged as a key alternative. Growing demand from AI data centers and other energy-intensive applications has made energy storage a rapidly expanding market segment.
LG has already begun transitioning some of its EV battery capacity to energy storage applications, while competitors, including SK On, are taking similar steps following U.S. policy shifts under former President Donald Trump that reduced EV demand.
GM has also scaled back some of its EV production, reducing its need for battery cells. The automaker sold its stake in a Michigan battery plant to LG and slowed construction on a planned plant with Samsung in Indiana.
“We don’t have enough demand to fill three factories,” said Kurt Kelty, GM’s Vice President of Battery, Propulsion, and Sustainability, in a January interview with Reuters. Kelty also noted that the energy storage market is experiencing a supply shortage.
The shift highlights GM and LG’s strategy to repurpose existing production capacity for high-demand applications beyond the EV market, positioning both companies to capitalize on the growth of energy storage systems.
