Tesla and LG Energy Solution have struck a $4.3 billion supply agreement for US-produced battery cells destined for Tesla's fast-growing energy-storage business, the companies confirmed on Monday.
Under the deal, LG Energy Solution will manufacture cells at a plant in the Lansing area of Michigan, a facility previously connected to General Motors before that programme was wound down. The cells are understood to be lithium iron phosphate chemistry, the format Tesla uses in its Megapack stationary storage product.
The agreement represents a material expansion of the two companies' existing relationship and gives Tesla a domestic supply anchor for Megapack at a time when the energy-storage segment has become one of the company's more reliable growth drivers. Tesla's energy generation and storage division posted revenues of roughly $10 billion in 2024, and Megapack deployments have accelerated sharply as grid operators and utilities build out large-scale battery installations.
Producing cells in Michigan also positions both companies to benefit from domestic content provisions under US clean-energy incentive frameworks, which favour American-made battery components.
LG Energy Solution, listed in Seoul, is one of the world's largest battery manufacturers and counts multiple global automakers among its customers. Securing a long-term, high-volume offtake agreement with Tesla for stationary storage — rather than automotive cells — diversifies its revenue base as electric-vehicle demand growth moderates in several key markets.
