Tesla signed a deal with LG Energy for battery supply

• The agreement with LG Energy is worth $4.3 billion for the supply of batteries.
• The batteries will be used in energy storage systems, not for electric vehicles.
• The supply of LFP batteries will begin in September 2025.

This is reported by Mezha, Ars Technica.

The company Tesla has signed a contract with the South Korean company LG Energy Solution for a total of $4.3 billion for the supply of lithium-iron-phosphate (LFP) batteries. According to the agreement, which is the second for Tesla in South Korea in the last month, the batteries will be produced at LG’s factories in the USA.

These batteries will not be used for electric vehicles but will be applied in energy storage systems. This will allow Tesla to expand its business in the field of energy storage technologies. LG Energy also plans to increase the production of LFP batteries in a joint venture with General Motors in Tennessee.

The agreement with Tesla provides the possibility of extending the supply term to seven years and increasing the volume of production over time. South Korean manufacturers are actively developing LFP batteries, which are cheaper and perform better in cold climates, allowing them to compete with Chinese companies that dominate the market.

LG Energy started production of such batteries at a plant in Michigan in the spring of 2025. It is worth noting that Samsung Electronics has also signed a long-term agreement with Tesla for the supply of chips for artificial intelligence for a total of over $16 billion.

Tags: Energy