From Michigan to Houston, a $4.3 billion battery pact between Tesla and LG Energy Solution signals a decisive US push to secure domestic energy storage supply chains.
The US government announced on March 16, 2026, that Tesla and South Korea’s LG Energy Solution have signed a supply agreement to construct a $4.3 billion lithium iron phosphate (LFP) battery cell manufacturing facility in Lansing, Michigan. Production is scheduled to begin in 2027.
According to the Department of the Interior, the American-made cells will be used in Tesla’s Megapack 3 energy storage systems, which are assembled in Houston. Officials said the project is intended to strengthen the domestic battery supply chain and reduce reliance on imports.
The deal was highlighted as part of a broader set of agreements presented by President Donald Trump’s administration during the Indo-Pacific Energy Security Summit.
According to Reuters, it follows earlier reports from July 2025, when reports indicated that LG Energy Solution had reached a $4.3 billion agreement to supply Tesla with batteries for energy storage systems.
At the time, the South Korean company confirmed the contract but did not identify Tesla as the customer or specify whether the batteries would be used in vehicles or storage units.
LG Energy Solution happens to be among the few producers of LFP batteries in the United States. The chemistry, widely used in energy storage applications, has historically been dominated by Chinese manufacturers with a limited presence in the US market.
The new facility is expected to play a role in diversifying supply and supporting domestic energy infrastructure.
The announcement underscores ongoing efforts by both companies to expand production capacity and align with U.S. policy goals aimed at reducing dependence on Chinese imports, particularly in the energy sector. The Lansing plant represents one of the largest investments in LFP battery manufacturing in the country to date.
