Hithium and LG Energy Solution Launch US Manufacturing of Battery Energy Storage Systems

Hithium and LG Energy Solution Launch US Manufacturing of Battery Energy Storage Systems
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Hithium has inaugurated a factory in Texas dedicated to manufacturing battery modules and energy storage systems, while LG Energy Solution has commenced mass production of lithium iron phosphate (LFP) cells in Michigan.

**Hithium**, based in Xiamen, China, has opened a facility in Mesquite, Texas, covering 484,441 square feet. This factory has an impressive annual production capacity of **10GWh**, producing both battery modules and complete battery energy storage systems (BESS). The company first announced its investment of **$100 million** in July of last year, but has since increased this figure to nearly **$200 million**.

The mayor of Mesquite, **Daniel Alemán Jr.**, expressed enthusiasm about Hithium’s investment, highlighting its collaboration with **40 school districts** and **Dallas College** to ensure a skilled workforce for the energy transition.

**Policy Landscape**: The opening of Hithium’s factory comes at a time of uncertainty for the US BESS sector. When the factory’s construction was announced less than a year ago, the US was experiencing a surge of investment in clean energy manufacturing, particularly in batteries and energy storage. The Biden-Harris administration introduced **10% bonuses** to investment tax credit (ITC) incentives for BESS projects that utilized a minimum portion of US-made content. Additionally, the production tax credit (PTC) incentives were aimed at boosting domestic manufacturing of battery modules and cells.

However, tariffs on battery products imported from China are expected to rise from **7% to 26%** by 2026, further incentivizing reliance on domestically produced products or those sourced from other countries. The current political climate, particularly following the start of President **Donald Trump’s** second term, leaves the future of incentives and tariffs uncertain. Analysts have noted that the ongoing US-China trade dispute has led to a slowdown in investment in new battery manufacturing, especially for smaller companies.

In the wake of potential changes, the **House of Representatives** passed a budget reconciliation bill on May 22, which could quickly eliminate tax credits. The industry hopes that a more moderate version of the bill will be approved by the Senate.

**LG Energy Solution** Begins LFP Production in Michigan
Meanwhile, **LG Energy Solution** announced on June 1 that it has initiated mass production of LFP cells at its facility in Holland, Michigan. Initially, the company had planned to establish a dedicated factory in Arizona for LFP cells intended for stationary storage. Instead, they decided to adapt existing production lines for electric vehicle (EV) batteries at their Michigan plants, investing around **$1.4 billion** in this strategic shift.

**Jaehong Park**, CEO of LG ES’s US system integrator subsidiary, LG ES Vertech, discussed this retooling effort and its strategic implications in a prior interview. The company is setting up three energy storage system (ESS) production lines at the Holland facility, each with an annual capacity of **5.5GWh**. Park emphasized that regardless of potential policy changes, the increasing demand for electricity from sources such as AI data centers will continue to drive investment in battery storage.

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This article provides a concise overview of the significant advancements made by Hithium and LG Energy Solution in the US battery manufacturing landscape, reflecting the ongoing evolution and challenges within the energy storage industry.