Tesla, LG Energy Partner on $4.3B Michigan Battery Plant

The federal government has announced that Tesla and South Korean company LG Energy Solution will build a massive $4.3 billion battery manufacturing facility in Michigan. The plant will produce lithium iron phosphate batteries for Tesla's energy storage systems, with production scheduled to begin in 2027.

Federal officials announced Monday that electric car manufacturer Tesla has partnered with South Korean battery maker LG Energy Solution to construct a massive $4.3 billion lithium iron phosphate battery production plant in Lansing, Michigan, with operations expected to commence in 2027.

According to the U.S. Department of the Interior, “American-made cells will power Tesla’s Megapack 3 energy storage systems produced in Houston, creating a robust domestic battery supply chain.”

The partnership announcement came as part of President Donald Trump’s administration’s Indo-Pacific Energy Security Summit, where multiple energy deals were showcased.

Reuters previously reported in July that LG Energy Solution had entered into the multi-billion dollar agreement with Tesla to provide energy storage batteries, as the electric vehicle company seeks to decrease its dependence on Chinese battery imports amid ongoing trade tariffs.

When the deal was initially revealed, the South Korean battery manufacturer confirmed a $4.3 billion three-year global contract for LFP batteries but declined to name the customer or specify whether the batteries would be used in electric vehicles or energy storage applications.

LG Energy Solution represents one of the limited number of lithium iron phosphate battery manufacturers operating in the United States. Chinese companies have historically controlled the LFP battery market but maintain minimal operations within American borders.