Sebang Lithium Battery Signs $1.8 Billion ESS Deal with LG Energy Solution in North America
Sebang Lithium Battery has secured a supply agreement worth $1.8 billion with LG Energy Solution to produce energy storage systems in North America. This partnership, effective in Q4 2026, aims to meet LGES's growing demand and comply with U.S. Inflation Reduction Act requirements.
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Sebang Lithium Battery will manufacture energy storage system (ESS) modules at LG Energy Solution's Ohio plant, targeting 10 GWh annual production by 2028. The contract will enable LGES to fulfill its contracts with utilities like PG&E and Duke Energy, which have committed to 15 GWh of grid storage by 2030.
The deal reduces LGES's reliance on Chinese suppliers, positioning Sebang as a Tier 1 supplier. However, Sebang's net debt-to-EBITDA ratio of 2.8x raises concerns about potential overvaluation of its stock.
Delays in permitting for the Ohio plant could jeopardize its break-even timeline. The agreement underscores a shift in the battery supply chain landscape due to U.S. regulatory changes.
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