General Motors and LG to Bring Back 700 Workers at Tennessee Battery Facility

General Motors and LG Energy Solution are converting their Tennessee electric vehicle battery manufacturing plant to produce energy storage batteries instead. The companies plan to rehire 700 previously laid-off workers in the second quarter as they shift focus from slower EV sales to the growing energy storage market.

General Motors and its battery manufacturing partner LG Energy Solution announced Tuesday they are converting their Tennessee facility to produce energy storage batteries instead of electric vehicle batteries.

The companies will bring back 700 workers who were previously let go, with production of lithium-iron phosphate batteries set to begin in the second quarter. Through their partnership called Ultium Cells, the companies had furloughed employees at the Tennessee location and an Ohio facility in January due to declining electric vehicle sales, with layoffs originally planned through mid-2026.

The shift comes as battery manufacturers look for ways to utilize excess production capacity originally intended for electric vehicles. Energy storage systems are increasingly in demand, particularly to power the growing number of artificial intelligence data centers.

LG has been converting some of its electric vehicle battery production lines to energy storage applications, joining competitors like SK On in making similar transitions following policy changes under President Trump that have dampened EV market enthusiasm.

General Motors has scaled back its electric vehicle manufacturing plans, reducing its need for battery cells. The automaker recently sold its ownership stake in a Michigan battery facility to LG and has slowed construction on another plant being built with Samsung in Indiana.

Kurt Kelty, GM’s vice president overseeing battery, propulsion and sustainability operations, told Reuters in January: “We don’t have enough demand to fill three factories.”

Regarding the energy storage sector, Kelty explained: “right now, the demand exceeds supply tremendously, and it’s going to continue to exceed it for the next several years.”