Seoul: LG Energy Solution Ltd. announced an agreement to supply batteries for energy storage system (ESS) projects to the U.S. arm of Hanwha Solutions Corp., with plans for local manufacturing to mitigate tariff uncertainties.

According to Yonhap News Agency, LG Energy Solution's subsidiary, LG Energy Solution Vertech, has committed to providing 5 gigawatt-hours of ESS batteries to Hanwha Qcells USA Corp. Deliveries are expected between 2028 and 2030. The lithium iron phosphate (LFP) ESS batteries will be produced at LG Energy Solution's Michigan facility, while Hanwha will produce solar modules in Georgia.

The arrangement's competitive edge lies in the local production of both batteries and solar modules in the United States. LG Energy Solution stated that this local production aligns with the Inflation Reduction Act's requirements, making their products eligible for subsidies and reducing risks associated with policy changes.

The company expressed its intention to strengthen its partnership with Hanwha Qcells, aiming for a long-term collaboration based on shared values. This collaboration is expected to enhance stability in the U.S. power supply.