LG Energy and GM originally built the factory as a joint venture to make EV batteries. However, the automaker has since pulled back on its EV ambitions, and GM sold its stake in the venture to LG last year. 

Now, the factory will make batteries for Tesla’s Megapack 3 energy-storage systems, which are manufactured in Houston. Those system are designed to store energy for electric utilities.

When demand for EVs in the U.S. plummeted after federal tax incentives were eliminated, automakers took financial hits in the tens of billions of dollars. Automakers and battery companies have since rushed to repurpose EV battery plants to serve the fast-growing market in utility-scale energy storage.

Tesla’s energy generation and storage business, which involves utility-scale batteries and solar panels, grew 27 percent last year even as its core automotive business declined by 10 percent.

The LG factory in Michigan will produce lithium-iron phosphate cells, known as LFP. This chemistry is commonly used in energy-storage batteries.