Kanishka Singh
WASHINGTON, March 16 (Reuters) – Electric car maker Tesla and South Korea’s LG Energy Solution have signed a supply agreement to build a $4.3 billion lithium iron phosphate (LFP) prismatic battery manufacturing plant in Lansing, Michigan, which is expected to start production in 2027, the U.S. government said on Monday.
“American-made batteries will power Tesla’s Megapack 3 energy storage system produced in Houston, creating a strong domestic battery supply chain,” the U.S. Interior Department said in a statement on Monday.
The agreement is part of a broader statement of agreements highlighted by President Donald Trump’s administration at the Indo-Pacific Energy Security Summit.
LG Energy Solution has signed a $4.3 billion deal to supply batteries for Tesla’s energy storage systems, a source told Reuters in July, as the U.S. company looks to reduce its reliance on Chinese imports due to tariffs.
At the time, the South Korean company said it had signed a $4.3 billion contract to supply LFP batteries globally over three years, but did not disclose the identity of the customer or whether the cells would be used in vehicles or energy storage systems.
LG Energy Solution is one of the few manufacturers of lithium iron phosphate batteries in the United States. Lithium iron phosphate battery chemistry has long been dominated by Chinese competitors with little presence in the U.S. market.
(Reporting by Kanishka Singh in Washington; Editing by Thomas Derpinghaus)