Tesla has signed a $4.3 billion deal with South Korea’s LG Energy Solution to supply lithium iron phosphate (LFP) batteries. These batteries will be used in Tesla’s energy storage systems, not its electric vehicles. Manufacturing for these batteries will begin in August 2027 at LG’s U.S. facilities.
Earlier this year, LG Energy had shared details of a 5.9 trillion won overseas LFP battery deal in its filings, without naming the client. The agreement also allows for extensions of up to seven years and the option to increase battery supply volumes based on Tesla’s needs.
This deal will help LG Energy expand its energy storage business in the United States. It also comes as South Korean battery makers push to produce more affordable LFP batteries to better compete with Chinese manufacturers. LG Energy started producing LFP batteries at its Michigan plant in May and is planning to add more capacity at its joint venture factory in Tennessee with General Motors.
Tesla has also signed a $16.5 billion deal with Samsung Electronics. Under this agreement, Samsung will manufacture Tesla’s artificial intelligence (AI) chips using its advanced 2-nanometer (2nm) technology.
Production will take place at Samsung’s new semiconductor plant in Texas and will continue through 2033. This long-term deal is expected to boost Samsung’s position in the global chipmaking market, especially in its foundry business.
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