LG Energy, once fixed on EV batteries, jumps to Plan B

Moving to ESS batteries has been more complicated than flipping a switch. LG Energy needed to develop a new battery chemistry that it had little experience with: lithium iron phosphate (LFP), a market that has been dominated by Chinese manufacturers.

LFP batteries also are used in EVs, but they have lower energy density than nickel-based batteries — LG Energy’s specialty — which means shorter driving ranges. But the LFP chemistry also is considered safer and more durable, making it suitable for storing large amounts of energy from a power plant.

The move to ESS was well-timed for battery and car companies that had sunk so much money into plants to make EV batteries. But it likely will not fully absorb all of that factory space.

Consultancy Benchmark Mineral Intelligence expects demand for stationary batteries in North America to hit 76 gigawatt-hours this year, Reuters reported earlier this year. And while storage demand is expected to nearly double over the next five years, to 125 GWh, Benchmark does not expect that to be enough to cover excess capacity installed for EVs.