The U.S. government names Tesla as a participant in LG Energy Solution's $4.3 billion battery project: achieving domestic LFP manufacturing

IT Home March 17 news: During the Indo-Pacific Energy Security Summit, the Trump administration announced agreements totaling $56 billion (IT Home note: at the current exchange rate, approximately RMB 386.03 billion).

Among them, Tesla was singled out to participate in an LG Energy Solution battery supply agreement worth $4.3 billion (at the current exchange rate, approximately RMB 296.63 billion). The deal is intended to build a lithium iron phosphate prismatic battery manufacturing plant in Lansing, Michigan, with production planned to begin in 2027.

A notice on the U.S. Department of the Interior website states: “Batteries produced in the U.S. will support Tesla’s Megapack3 energy storage systems produced in Houston, thereby building a strong domestic battery supply chain.”

Over the years, Tesla has long relied on Contemporary Amperex Technology (300750) as one of its primary suppliers. However, as the U.S. has imposed additional tariffs on Chinese imported products, and as Tesla’s energy business that is highly dependent on lithium iron phosphate cells (mainly Megapack energy storage batteries) continues to grow, supply chain adjustments have become inevitable.

The deepened cooperation between LG Energy Solution and Tesla in this case holds strategic significance for both sides. For Tesla, it ensures a supply of domestically produced batteries that meet tariff requirements for its rapidly growing power and energy department. For LG Energy Solution, which produces lithium iron phosphate batteries in Michigan, it thus becomes the only major supplier currently producing at scale in the U.S., ahead of competitors such as Samsung SDI and SK On.

The Lansing plant of LG Energy Solution was previously the Ultium Cells3 plant jointly operated with General Motors. In May 2025, LG Energy Solution acquired General Motors’ stake, with annual capacity reaching 50GWh. LG Energy Solution said the contract includes options to extend the supply period for up to seven years and to increase the supply volume through further negotiations.