Tesla partners with LG for US made LFP batteries in new $4.3B deal

Tesla has entered a $4.3 billion agreement with South Korea’s LG Energy Solution (LGES) to supply lithium iron phosphate (LFP) batteries manufactured in the United States from August 2027 to July 2030. These batteries are intended exclusively for Tesla’s stationary energy storage systems, particularly the Megapack grid-scale battery units, rather than for electric vehicles. The Megapacks, which integrate battery modules, inverters, and thermal systems, store excess renewable energy and help stabilize power grids, supporting decarbonization efforts. Each Megapack can store over 3.9 MWh of energy, enough to power roughly 3,600 homes for an hour. This deal follows Tesla’s recent announcement of its first overseas battery storage plant in Shanghai, which aims to produce 10,000 Megapacks annually. By partnering with LGES to produce LFP batteries domestically, Tesla aims to strengthen U.S. supply chains, reduce dependence on Chinese suppliers like CATL