AI Is Hungry. Tennessee Has the Batteries.

Ultium Cells invests $70M to retool its Tennessee plant for LFP energy storage, recalling 700 workers for Q2 2026 production

25 Mar 2026

led to begin in the second quarter of this year.

The shift reflects two simultaneous pressures. EV demand in the US has weakened following the removal of federal Inflation Reduction Act tax credits, leaving Spring Hill underused. At the same time, electricity consumption from AI data centres and the need to store power from wind and solar installations is pushing energy storage demand sharply higher.

LFP chemistry, valued for lower cost, thermal stability, and long cycle life, has become the dominant choice for stationary storage applications.

Around 700 workers laid off in January are being recalled and retrained for the new line. Cells produced at Spring Hill will be supplied to LG Energy Solution Vertech, the company's US storage division, for assembly into large-scale battery enclosures serving grid infrastructure and data centres across North America.

LG Energy Solution is targeting global energy storage production capacity above 60 GWh in 2026, with more than 80 per cent of that capacity in North America. Spring Hill joins facilities in Michigan, Ontario, and a Honda joint venture, all shifting progressively toward LFP output for stationary use.

The broader trend is clear. Battery manufacturers are diversifying away from EV exposure toward storage markets where demand is steeper and less vulnerable to policy changes. For Spring Hill, previously producing cells for the Cadillac Lyriq, the conversion returns workers to the floor and places a former EV facility at the centre of domestic clean energy infrastructure.

Whether the US retains sufficient policy support to sustain that buildout remains an open question.