South Korea’s dominant battery manufacturers LG Energy Solution and Samsung SDI are installing lithium iron phosphate (LFP) production capabilities at their US facilities with General Motors, marking a strategic retreat from premium battery chemistries as the electric vehicle market stumbles.
LG Energy Solution launched full-scale LFP battery production for energy storage systems at its Michigan plant during the second half of this year, while Samsung SDI plans to ship LFP cells from its Ulsan facility to its Michigan battery pack operation, targeting grid operators and North American customers.
The shift represents a fundamental change for Korean battery makers, who built their reputations on high-nickel NCM chemistries that deliver superior energy density but carry significantly higher costs. GM has repeatedly scaled back EV production targets and delayed facility openings as consumer demand fails to materialize, pressuring suppliers to prioritize affordability over performance.
Chinese companies currently control 85% of the global energy storage market, compared to just 5% and 4% for Samsung SDI and LG Energy Solution respectively – a sharp decline from their combined 55% share three years ago.
The Korean companies’ belated embrace of LFP technology suggests they recognize cost, not cutting-edge performance, will determine winners in the mainstream EV market. However, their tardiness in adopting the chemistry raises questions about whether they can meaningfully challenge established Chinese competitors who have perfected LFP manufacturing at scale.
