$2 Billion LG Battery Plant Ditches GM for AI Data Centers — Here's Why

South Korean battery giant LG Energy Solution has completed construction of its gigafactory in Lansing, Michigan, a facility that cost over $2 billion and spans 2.8 million square feet on a 226-acre site. Originally conceived as a joint venture between LGES and General Motors under the name Ultium Cells, the plant was designed exclusively to produce electric vehicle batteries.

But the landscape changed dramatically. The end of federal EV tax credits, combined with slower-than-expected electric vehicle sales growth, forced GM to sell its stake in the facility last year, leaving LGES as the sole owner and operator. The breakup was part of a broader wave of joint-venture dissolutions and restructurings that have shaken America's EV industry. Similar splits occurred between Ford and SK On, GM and Samsung SDI, and Stellantis and LGES. The entire sector is reeling from what executives describe as regulatory whiplash in the United States, which has pulled most government support for environmentally friendly projects.

Now, the factory is being repurposed. Surging demand for battery energy storage systems (ESS) from AI data centers and utility companies is breathing new life into the facility. LGES has already signed contracts with several major clients to supply batteries for ESS applications, effectively filling the capacity that was originally earmarked for EVs. The plant will begin production this year, with full ramp-up expected by 2026. Inside the factory, robots and automated guided vehicles handle most of the work, transporting raw materials through brightly lit halls while human supervisors oversee operations. The atmosphere is clinical and slightly eerie, executives say, as the facility quietly hums toward a cleaner future — one that now looks very different from what was originally planned.