The U.S. government announced on Monday that Tesla and LG Energy Solution have entered into a supply agreement to construct a $4.3 billion lithium iron phosphate (LFP) prismatic battery cell manufacturing plant in Lansing, Michigan. The facility is expected to commence production in 2027. “American-made cells will be utilized to power Tesla’s Megapack 3 energy storage systems manufactured in Houston, establishing a strong domestic battery supply chain,” stated the U.S. Department of the Interior.
This new agreement between Tesla and LG Energy Solution was highlighted as part of a series of deals showcased at the Indo-Pacific Energy Security Summit, endorsed by President Donald Trump’s administration. In July, a source informed Reuters that LG Energy Solution had secured a $4.3 billion deal to supply energy storage system batteries to Tesla, as the company aimed to decrease its reliance on Chinese imports due to tariffs.
LG Energy Solution, one of the few LFP battery producers in the U.S., previously disclosed a $4.3 billion contract to supply LFP batteries globally over three years, without specifying the recipient or the intended use in vehicles or energy storage systems.
Additionally, LG Energy Solution operates NextStar Energy in Windsor, Ontario, which was formerly a joint venture with Stellantis until LG acquired full ownership. The Canadian plant, heavily subsidized by the Ontario and Canadian federal government, was originally intended for the EV battery market but has since shifted its focus to prioritize energy storage due to a subdued EV market, although it retains the capability to produce batteries for both sectors.