General Motors and battery partner LG Energy Solution announced Tuesday that they are retooling an electric vehicle battery plant in Tennessee to manufacture batteries intended for energy storage systems. The conversion will be carried out by their joint venture, Ultium Cells.
Ultium Cells plans to recall 700 workers who had been laid off at the Tennessee facility so production can begin on lithium-iron phosphate batteries in the second quarter. The company previously implemented workforce reductions in January at the Tennessee plant as well as at another manufacturing site in Ohio, with layoffs stretching through mid-2026. Those cuts were attributed to slower electric vehicle sales.
Battery makers are exploring ways to address the surplus of EV battery production capacity, and energy storage has emerged as a prominent option. The companies noted that demand for energy to support forthcoming AI data centers is one factor that makes energy storage an attractive market for excess battery output.
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The conversion of the Tennessee plant and the recall of laid-off employees signal a tactical shift by Ultium Cells to redeploy manufacturing capacity toward energy storage — a segment that can absorb batteries not immediately consumed by EV demand. The precise timeline calls for lithium-iron phosphate battery production to commence in the second quarter, with the workforce recall enabling the restart.
Company statements indicate the retooling is part of broader efforts across the battery industry to find demand outlets for existing capacity. Ultium Cells' actions reflect one response to slower-than-expected EV sales that prompted the January layoffs at both the Tennessee and Ohio sites, which were scheduled through mid-2026.
How this redeployment will affect longer-term production plans, customer contracts, or broader supply dynamics was not detailed in the company announcements. The shift underscores the intersection of automotive manufacturing, battery production, and the growing market for grid and data-center related energy storage solutions.