The U.S. government announced on Monday that Tesla, an electric vehicle (EV) manufacturer, and LG Energy Solution from South Korea have agreed to establish a $4.3 billion lithium iron phosphate (LFP) prismatic battery cell production plant in Lansing, Michigan. The facility is scheduled to start production in 2027. According to a statement by the U.S. Department of the Interior, these American-made cells will be utilized in Tesla’s Megapack 3 energy storage systems manufactured in Houston, contributing to a strong domestic battery supply chain.
This collaboration was part of a broader series of agreements revealed during the Indo-Pacific Energy Security Summit, as highlighted by the administration of President Donald Trump. Earlier in July, Reuters reported that LG Energy Solution had sealed a $4.3 billion deal to supply Tesla with batteries for energy storage systems, aiming to reduce reliance on Chinese imports due to tariffs.
LG Energy Solution is among the limited number of LFP battery producers in the United States, a market traditionally dominated by Chinese competitors with limited presence in the U.S. market. The company also operates NextStar Energy in Windsor, Ontario, previously a joint venture with Stellantis until LG acquired full ownership. The Canadian plant, heavily subsidized by the Ontario and Canadian federal governments, was initially focused on the EV battery market but has since shifted to prioritize energy storage, although it retains the ability to manufacture batteries for both purposes.