The United States government said LG Energy Solution (LGES) will manufacture lithium iron phosphate (LFP) battery cells for Tesla at a facility in Lansing, Michigan, as part of broader energy sector investments announced at the Indo-Pacific Energy Security Summit in Tokyo.
The cells are intended for Tesla’s stationary energy storage systems, particularly its Megapack products. The project forms part of a wider package of initiatives worth $56 billion involving cooperation between Asian and U.S. companies.
See also: LG Energy Solution to Take Full Control of Canada’s NextStar Battery Venture
According to a U.S. government statement, the plan includes a $4.3 billion facility in Lansing to produce prismatic LFP battery cells, with production expected to begin in 2027. The facility is described as a joint venture between Tesla and LGES, though both companies have not publicly confirmed details of the arrangement.
Reports indicate that LGES had previously established a battery cell plant in Lansing in partnership with General Motors, which exited the joint venture in late 2024. The site is now expected to be repurposed to manufacture LFP cells for Tesla, replacing earlier plans to produce nickel manganese cobalt (NMC) batteries.
See also: LG Energy Solution Advances Sodium-Ion Battery Pilot Line in China
The batteries are expected to be used in Tesla’s Megapack 3 system, a large-scale energy storage product unveiled in 2025 with a capacity of 5 MWh per unit. Tesla plans to manufacture the system at its Megafactory in Houston, Texas.
The $4.3 billion figure cited by U.S. authorities aligns with earlier reports from South Korean media, which described a supply agreement between Tesla and LGES covering deliveries between 2027 and 2030. Those reports did not initially specify a production location.
Battery energy storage systems (BESS) such as Tesla’s Megapack are increasingly used to stabilise power grids, store renewable energy, and manage peak electricity demand. They are also gaining traction in data centres, where they provide backup power and support energy cost optimisation.
See also: LG Energy Solution to Sell Ohio Battery Plant Assets to Honda in $2.86 Billion Deal
The growing demand for energy storage has been partly driven by the expansion of artificial intelligence infrastructure, which requires reliable and scalable power solutions.
While details of the Tesla-LGES collaboration remain limited, the project underscores the strategic importance of battery manufacturing in the United States and the shift toward LFP chemistry for cost-effective and durable energy storage applications.