July 30, 2025 – According to insiders cited by Reuters on Wednesday, South Korean battery manufacturer LG Energy Solution has inked a $4.3 billion deal with Tesla to supply lithium iron phosphate (LFP) batteries for the latter’s energy storage systems.
The sources revealed that LG Energy Solution will produce and deliver these LFP batteries from its U.S. plant. Besides Tesla, the company also counts General Motors among its major clients.
Earlier on Wednesday, LG Energy Solution announced that it had secured a three-year global LFP battery supply contract worth $4.3 billion. However, at that time, it did not disclose the identity of the customer or specify whether the batteries would be used for vehicles or energy storage systems.
In response to Reuters’ inquiries, LG Energy Solution stated, “Under the agreement, we are bound by confidentiality obligations and cannot disclose the customer’s identity.”
This move comes after Samsung reached a $16.5 billion chip foundry agreement with Tesla. Initially, Samsung also kept the customer’s identity under wraps, but it was later confirmed to be Tesla.
The LFP battery supply contract between LG Energy Solution and Tesla will run from August 2027 to July 2030. LG Energy Solution mentioned that the contract includes an optional clause allowing for a maximum extension of seven years, with the possibility of increasing the supply volume based on negotiations with the customer.
Currently, LG Energy Solution is one of the few LFP battery manufacturers in the United States. The company commenced LFP battery production at its Michigan plant in May this year. Historically, this battery technology has been dominated by Chinese competitors, although Chinese battery companies have a relatively small presence in the U.S. market.
As of the time of reporting, Tesla had not responded to requests for comment.
