Affordable EV Batteries on the Horizon as Ultium Upgrades Tennessee Plant

Ultium Cells, a joint venture between LG Energy Solution and General Motors, has decided to upgrade its battery cell manufacturing plant in Spring Hill, Tennessee, to produce low-cost lithium iron phosphate, or LFP, battery cells as it aims to expand its business portfolio.

The conversion of battery cell lines at the Tennessee site will begin later this year, with commercial production expected to kick off by late 2027. Currently, the plant produces lithium-ion batteries using cathode materials such as nickel, cobalt, and manganese. The upgrade will allow for the production of LFP cells.

\”This upgrade underscores the strength of our partnership with General Motors and our shared commitment to advancing EV battery innovation,\” said Suh Won-joon, executive vice president and head of the Advanced Automotive Battery division at LG Energy Solution.

\”We’ll leverage our extensive U.S. manufacturing experience at the joint venture facility, accelerating our efforts to deliver new chemistries and form factors that address unmet needs in the EV market.\”

The joint venture stated that the upgrade costs will be covered by the initial $2.3 billion investment announced in 2021. Another Ultium Cells plant in Warren, Ohio, will continue producing battery cells using nickel, cobalt, manganese, and aluminum. The company aims to significantly reduce battery pack costs compared to current high-nickel options while expanding consumer EV choices with LFP technology.

\”At General Motors, we’re pushing the boundaries of battery technology to offer our EV customers the best balance of range, performance, and affordability,\” said Kurt Kelty, vice president of batteries, propulsion, and sustainability at General Motors.

\”The Spring Hill upgrade will allow us to scale up production of lower-cost LFP cell technologies in the U.S., complementing our high-nickel and future lithium manganese-rich solutions. This move further diversifies our growing EV portfolio.\”

The International Energy Agency’s Global EV Outlook 2025 report reveals that LFP batteries claimed nearly half of the global EV battery market last year, with China leading the charge in lower-cost battery production. The report noted that LFP batteries accounted for about 80% of batteries sold in China during the final two months of last year.

\”LFP batteries have now reached a performance level suitable for most EV applications, making their lower cost a key selling point for automakers targeting mass markets,\” the report stated.

While U.S. battery production capacity surpassed 200 gigawatt-hours in 2024 – more than doubling since 2022 – production costs in America remain higher than in Asia, according to the IEA report. It also cautioned that sudden policy changes could impact the battery industry, potentially increasing production costs or slowing expansion in the near to medium term.