LG plans to launch a new type of lithium iron phosphate battery to increase its presence in the energy storage sector and challenge Chinese companies.

LG's new energy plan is set to launch a commercial version of the greatly improved Lithium Iron Phosphate (LFP) battery next year, in order to solidify its position in the rapidly growing energy storage market and compete with Chinese rivals. The Chief Technology Officer of this Seoul-based battery manufacturer, Kim Je-Young, stated in an interview on Wednesday that the company will begin mass-producing a new type of Lithium Iron Phosphate battery cells in 2027, which have higher energy density and longer cycle life. This is the first time LG's new energy division has disclosed plans for a significantly enhanced LFP battery, aiming to reposition this chemistry system from being a low-cost option dominated by China, to a high-value solution for energy storage systems. Kim Je-Young said: "So far, LFP batteries have been seen as cheap products produced in China, mainly used in mid-to-low-end electric vehicles, but with increasing data, the market will need batteries that can provide high power output and longer life." LG's new energy strategy reflects a structural shift in the global battery market. The slowdown in demand for electric vehicles is forcing manufacturers to reorient their investments, and AI-driven data centers are becoming an important new source of demand for durable, high-performance energy storage equipment. Kim Je-Young said: "By significantly optimizing existing LFP technology, we have successfully developed a new model with improved energy density. China may also be developing similar technology, but the execution will determine the ultimate winner." LG's new energy has been shifting its production capacity towards the energy storage sector. The company previously stated it will upgrade some electric vehicle battery production lines, increase the annual production capacity of energy storage system battery cells from 36 gigawatt-hours to over 60 gigawatt-hours, and aim to secure orders of at least 90 gigawatt-hours this year. Despite LG's new energy division reporting an unexpected loss of 122 billion Korean won (about $84 million) in the fourth quarter of last year, Kim Je-Young predicts that the company's performance will rebound later this year with the booming development of the energy storage business. In addition to Lithium Iron Phosphate batteries, the company is also investing in sodium-ion batteries and dry coating technology to reduce costs and catch up with China in the fields of electric vehicles, energy storage systems, and humanoid Siasun Robot & Automation. Sodium-ion batteries are considered a promising next-generation alternative due to their cheaper raw materials and more abundant reserves compared to lithium. This technology is also considered to be high in safety and can operate at temperatures as low as -40 degrees Celsius. Kim Je-Young stated that LG's new energy is the first among Korean battery manufacturers to develop this technology and sees it as a low-cost alternative to LFP in certain niche segments. LG's new energy is also hopeful about dry coating technology, to replace the high-energy-consuming wet processing technology needed to manufacture positive and negative electrode components of batteries. This transition helps save energy consumption, equipment costs, and space. Tesla, Volkswagen, Samsung SDI, and many other automotive and battery companies are all pursuing this technology. Kim Je-Young said that LG's new energy has completed nearly pilot-scale production of dry coating technology. Full-scale production could start as early as the end of 2028. He added: "I believe this will be the next generation technology, which will help us win against China in any market - electric vehicles, energy storage systems, or humanoid Siasun Robot & Automation."