The decision comes amid a slowdown in electric vehicle (EV) battery demand, prompting the company to adjust its investment pace.
The Korean battery maker originally planned to invest 7.2 trillion won ($5.5 billion) to build facilities capable of producing 36 gigawatt-hours (GWh) of cylindrical batteries and 17 GWh of lithium iron phosphate (LFP) batteries for ESS.
While construction of the cylindrical battery plant continues, work on the ESS-specific facility has been paused.
An LG Energy Solution spokesperson said, "We aim to flexibly respond to market conditions by adjusting our investment pace and focusing on optimizing existing production facilities. The Arizona plant will still play a crucial role in our future North American ESS business."
The company had previously converted some EV battery production lines in Europe and Michigan to ESS manufacturing due to reduced EV battery demand.
This shift has temporarily diminished the urgency for a dedicated ESS plant, leading to the construction halt in Arizona.
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