LG Energy Eyes US Defense Drones Amid EV Slowdown

LG Energy Solution is actively considering supplying batteries for US defense drones and other unmanned weapons systems. This strategic pivot marks a significant shift, driven by a slowdown in electric vehicle (EV) demand and burgeoning opportunities within the military hardware sector.

Key Strategic Figures

• LG Energy’s Lansing, Michigan, plant capacity: 35 gigawatt-hours annually by end of next year.
• Tesla Inc.’s Megapack energy storage systems to be supplied starting in 2027.
• US battery market faces “very limited chance” of excess capacity through 2035 or 2040.

Shift in North American Strategy

LG Energy’s North American operations now see energy storage as the majority business, contrasting with EV batteries dominating outside the US. Bob Lee, the North American president, highlighted the growth and opportunities in defense funding, indicating a clear reorientation. The company expects its energy storage division to achieve profitability by year-end.

Expanding Energy Storage Footprint

The company is rapidly expanding its energy storage market presence, fueled by demand for infrastructure upgrades and AI data centers. A recent ceremony for its new Lansing, Michigan, plant, a partnership with General Motors Co., underscores this expansion. This facility will produce lithium-iron-phosphate cells for Tesla’s Megapack systems and nickel-based battery cells for Toyota Motor Corp. vehicles.

Broader Industry Trends & National Security

Other South Korean battery manufacturers, including Samsung SDI Co. and SK On, are also repurposing factory capacity for grid storage as North American automakers scale back EV production plans. This collective move aligns with national security priorities, especially given the Trump administration’s recent tariffs on imported drones and components. Bob Lee specifically emphasized the critical national security implications of avoiding Chinese batteries for energy storage.

The broader implication is a strategic recalibration across the South Korean battery industry, moving beyond a sole focus on EVs to capitalize on defense and grid-scale energy storage, ensuring long-term demand stability and addressing geopolitical supply chain concerns.