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Tesla Confirmed as Buyer in LG's $4.3B US Battery Plant Deal

The US Department of the Interior has officially confirmed Tesla as the previously undisclosed client in a major battery supply deal signed by LG Energy Solution in July. The partnership involves building a $4.3 billion LFP prismatic battery cell manufacturing facility in Lansing, Michigan, with production slated to begin in 2027. The American-made cells will specifically power Tesla's Megapack 3 energy storage systems produced in Houston. LG Energy Solution had initially kept the buyer's identity confidential when announcing the multi-year supply agreement last year.

Key Points: Tesla, LG Energy Solution Confirm $4.3B US Battery Plant Deal

  • US confirms Tesla as LG's battery client
  • $4.3B LFP prismatic cell plant in Michigan
  • Production launch set for 2027
  • Batteries to power Tesla Megapack 3 systems
2 min read

US confirms Tesla as buyer of LG Energy Solution's July battery deal

US government confirms Tesla as buyer in LG Energy Solution's $4.3B LFP battery deal for Michigan plant, boosting domestic supply chain.

"Tesla and LG Energy Solution are expanding their partnership... - U.S. Department of the Interior"

Seoul, March 17

The US government has confirmed that global electric vehicle giant Tesla was the customer in a battery supply deal secured by LG Energy Solution in July, industry sources said.

The US Department of the Interior posted the results of the Indo-Pacific Energy Security Ministerial and Business Forum held in Tokyo over the weekend, which included the Tesla-LG Energy Solution deal, reports Yonhap news agency.

"Tesla and LG Energy Solution are expanding their partnership with a supply agreement to build a US$4.3 billion LFP prismatic battery cell manufacturing facility in Lansing, Michigan, launching production in 2027," the U.S. department said on its website.

"American-made cells will power Tesla's Megapack 3 energy storage systems produced in Houston, creating a robust domestic battery supply chain," it added.

In July, LG Energy Solution said it signed a lithium iron phosphate (LFP) battery supply deal with an overseas client, without disclosing the buyer.

The South Korean battery maker said it will supply LFP batteries to the unnamed client for three years, from Aug. 1, 2027, to July 31, 2030.

Industry watchers had speculated Tesla was the counterpart, but LG Energy Solution refrained from providing details, citing business confidentiality.

In July, LG Energy Solution Ltd, South Korea's leading battery maker, said it has signed a 5.9 trillion-won ($4.26 billion) lithium-ion phosphate (LFP) battery supply deal with an overseas client.

In a regulatory filing, LGES said it will supply LFP batteries to the unnamed client for three years, from Aug. 1, 2027, to July 31, 2030.

The contract value is equivalent to 23.2 percent of the company's annual sales of 25.6 trillion won last year, the filing said.

The contract period and value are subject to change depending on the outcome of further consultations with the client, it added.

In the United States, LGES operates three battery cell plants in Ohio, Tennessee and Michigan. The Michigan plant currently produces LFP batteries for energy storage systems (ESSs).

- IANS

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Reader Comments

P
Priya S
Interesting to see the focus on LFP batteries for energy storage. They are safer and cheaper than NMC. Perfect for India's climate and budget. Hope our government's PLI scheme attracts such tech partnerships. We have the demand, we just need the manufacturing scale. 🇮🇳
R
Rohit P
Production starts in 2027? That's a long wait. By then, Chinese battery tech will be two generations ahead. The US is playing catch-up. India needs to move faster if we want to be a player, not just a market.
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Sarah B
As someone working in renewables, the Megapack deal is the key takeaway. Large-scale energy storage is the missing link for solar and wind. If Tesla and LG can drive down costs, it benefits the global transition, including India. Good news overall.
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Vikram M
Respectfully, while this US-Korea partnership is impressive, I'm more concerned about the slow pace of battery cell manufacturing approvals in India. We talk about Aatmanirbhar Bharat, but the ground reality for setting up such plants is still full of red tape. The intent is there, but execution needs to match.
K
Karthik V
LG is a solid partner. They already have a plant in Gujarat, right? Hopefully, some of this advanced LFP prismatic cell tech trickles down to their Indian operations. We need reliable batteries for our EVs that don't catch fire in the summer heat! 🔋

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