According to media reports， South Korean battery manufacturer LG Energy Solution has signed a $4.3 billion contract with Tesla to supply lithium iron phosphate (LFP) batteries for Tesla’s energy storage systems. Sources familiar with the matter revealed that LG Energy Solution will supply these LFP batteries from its U.S. plant， catering to clients like Tesla and General Motors.
LG Energy Solution announced on Wednesday morning the signing of a three-year global LFP battery supply contract valued at $4.3 billion. However， the company has not disclosed the identity of the customer nor specified whether the LFP batteries are intended for automotive applications or energy storage systems. In response to Reuters’ inquiry， LG Energy Solution stated， “As per the agreement， we are bound by confidentiality obligations and cannot disclose the customer’s identity.” This situation echoes a previous instance where Samsung initially withheld customer information for a $16.5 billion chip contract， which was later confirmed to be with Tesla.
The LFP battery supply contract secured by LG Energy Solution is set to run from August 2027 to July 2030. Furthermore， the agreement includes an optional clause that allows for an extension of the contract period by up to seven years， with the potential to increase supply volumes based on negotiations with the client. This strategic move positions LG Energy Solution as one of the few LFP battery manufacturers in the United States. The company commenced LFP battery production at its Michigan facility in May of this year. This particular battery technology has historically been a stronghold for Chinese manufacturers; however， Chinese battery companies have a limited presence and market penetration within the U.S. market.
