LG Energy Solution has officially commenced production at its $2 billion Lansing, Michigan battery plant, originally co-developed with General Motors before GM exited the venture in late 2024. The facility now supplies advanced battery cells for Toyota’s upcoming 2027 Highlander EV and will produce lithium iron phosphate cells for Tesla’s Megapack 3 grid storage system starting in 2027.
- LG Energy Solution began cell production at Lansing plant, formerly GM joint venture.
- Toyota’s 2027 Highlander EV will use Lansing-made nickel manganese cobalt cells.
- Tesla’s Megapack 3 grid storage to receive lithium iron phosphate cells from 2027.
What happened
LG Energy Solution launched production at its Lansing, Michigan battery plant, a site originally developed for a joint venture with General Motors. GM sold its stake in December 2024, withdrawing from the project and related EV plans in Lansing. Since the transition, LG has invested over $2 billion into the 226-acre facility, employing around 900 people with planned capacity to exceed 35 GWh annually and potential growth to 1,700 staff.
The plant now produces nickel manganese cobalt cells for Toyota’s upcoming Highlander EV slated for 2027. It also manufactures lithium iron phosphate (LFP) cells dedicated to grid storage applications. Major utility customers such as DTE Energy and Consumers Energy are buying these batteries, with Tesla securing LFP prismatic cells under a $4.3 billion agreement to supply its Megapack 3 system built in Houston, with Lansing lines expected online in 2027.
Why it matters
The Lansing plant’s evolution demonstrates the shifting landscape of the electric vehicle and energy storage battery supply chain. Despite GM's retreat, Michigan remains a critical hub for battery production, facilitating partnerships with diverse automotive and energy companies rather than relying on a single automaker. The facility’s dual focus on EV battery cells and grid storage technologies highlights the expanding market demand beyond just electric vehicles.
LG’s decision to produce both nickel manganese cobalt and lithium iron phosphate cells reflects strategic adaptation to serve multiple segments. The collaboration with Toyota supports the growing US EV market, while supplying Tesla’s Megapack addresses increasing needs for grid-scale energy storage solutions. This diversification reduces risk and aligns with broader trends of electrification in transportation and renewable energy integration.
What to watch next
Key indicators will include the plant’s production ramp-up toward its 35 GWh annual capacity and workforce expansion toward 1,700 employees. Monitoring Tesla’s Megapack 3 supply chain and Toyota Highlander EV battery integration will provide insight into demand stability and potential new contracts. Tracking Michigan’s ongoing state incentive programs and their impact on battery manufacturing investments will also be significant to understand regional policy effectiveness.
Additionally, industry watchers should observe how LG Energy Solution’s strategy compares with other manufacturers shifting toward diversified battery chemistries and markets. The increasing emphasis on lithium iron phosphate cells for grid storage and automotive use signals how electric infrastructure investment and vehicle electrification will drive battery innovation and factory deployments in North America.