"LG Corp. Considers Supplying Drone Batteries to the U.S."
Part of Efforts to Strengthen U.S. Drone Supply Chain… Chinese Companies Excluded
With Electric Vehicle Demand Slowing, Company Considers Expanding into Defense Sector Following ESS Business
LG Corp. Asks U.S. Government to Regulate Chinese-Made Energy Storage Systems
[Edaily Reporter Kim Kyeo-Re ] LG Energy Solution announced that it is considering supplying batteries for unmanned weapon systems, including drones, in the United States. In response to slowing demand for electric vehicles, the company plans to expand its business scope into the defense sector, following its entry into the energy storage system (ESS) market. LG Energy Solution held a grand opening ceremony for its Lansing, Michigan, plant on the 18th (local time). Attendees at the ceremony are touring the production facility. (Photo: LG Energy Solution) Bob Lee, President of LG Energy Solution’s North American subsidiary, stated in an interview with Bloomberg on the 18th (local time) that LG Energy Solution has received inquiries regarding defense business from multiple U.S. companies and government agencies and is carefully reviewing them. Discussions are still in the early stages. If this leads to LG Energy Solution supplying batteries to actual defense contractors, it would mark a significant shift in the business strategy of LG Corp., which has traditionally avoided the defense sector. President Lee compared LG Corp.’s entry into the defense sector to how consumer goods companies typically avoid venturing into the alcohol or tobacco industries. “LG Corp.’s perspective on the defense industry used to be similar, but now we see clear growth potential and business opportunities,” Lee said. These discussions are taking place as the Donald Trump administration works to replenish military supplies depleted in the wars in Iran and Ukraine and to strengthen domestic supply chains for strategic technologies such as drones. The U.S. government recently decided to impose tariffs of up to 100% on imported drones and related components. As demand for electric vehicles in North America has slowed compared to initial expectations, LG Energy Solution is realigning its local operations to focus on energy storage systems (ESS). Currently, ESS accounts for more than half of its U.S. business, while the company focuses on EV batteries in regions outside the U.S. LG Energy Solution has converted five of the eight factories it built in North America for electric vehicles to produce ESS. This move is based on the assessment that demand for ESS is growing rapidly due to the construction of artificial intelligence (AI) data centers and expanded investment in power infrastructure. LG Energy Solution expects its ESS business to turn a profit by the end of this year. LG Energy Solution also opened its battery plant in Lansing, Michigan, built in partnership with General Motors (GM), on the same day. According to Bloomberg, the Lansing plant is scheduled to supply lithium iron phosphate (LFP) battery cells worth approximately $4.3 billion for Tesla’s Megapack ESS starting in 2027. It will also produce nickel-based battery cells for Toyota vehicles. LG Corp. also called for stricter regulations targeting Chinese companies in the U.S. ESS market. President Lee stated that he asked U.S. Secretary of the Interior Doug Burgum, who attended the Lansing plant’s opening ceremony, to consider measures to restrict Chinese companies’ access to the ESS market. President Lee reported that Secretary Burgum agreed with the need to restrict Chinese companies, noting that “it is very important for the United States to have a more independent and self-reliant supply chain.”
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