The U.S. government announced on Monday a partnership between electric vehicle manufacturer Tesla and South Korea’s LG Energy Solution to construct a $4.3 billion lithium iron phosphate (LFP) prismatic battery cell manufacturing plant in Lansing, Michigan. The facility is set to commence production in 2027 and will supply American-made cells for Tesla’s Megapack 3 energy storage systems made in Houston, establishing a solid domestic battery supply chain, as stated by the U.S. Department of the Interior.
This agreement is part of a series of deals emphasized by the Trump administration at the Indo-Pacific Energy Security Summit. LG Energy Solution had previously entered a $4.3 billion deal to provide Tesla with energy storage system batteries in an effort to lessen its dependence on Chinese imports due to tariffs, according to a source disclosed to Reuters in July.
LG Energy Solution, one of the few LFP battery producers in the U.S., revealed a $4.3 billion contract to supply LFP batteries globally over three years, without specifying the recipient or the intended utilization in vehicles or energy storage systems. The company also operates NextStar Energy in Windsor, Ontario, a battery cell factory that was previously a joint venture with Stellantis before being acquired by LG.
The Canadian plant, heavily subsidized by the Ontario and Canadian federal governments, was originally focused on serving the EV battery market but has since shifted its focus to prioritize energy storage due to a sluggish EV market. Nevertheless, it retains the capability to manufacture batteries for both sectors.