LG Energy Solution Tesla Battery Deal & US Plant Conversion for ESS - News and Statistics

Mar 18, 2026

According to a report from Energy-Storage.news, LG Energy Solution has secured a substantial battery supply agreement with Tesla. The United States government announced the finalized contract, which is valued at 4.3 billion dollars.

The lithium iron phosphate prismatic cells produced under this pact are designated for an energy storage system solution manufactured in Texas. Production of these cells is scheduled to commence in 2027 at a new facility in Michigan.

Concurrently, the battery maker is adjusting its existing operations in the United States. One of its Michigan factories, originally built for electric vehicle batteries, was reconfigured for energy storage system cell manufacturing. That site began large-scale output of such batteries in early May 2025.

This shift in production focus aligns with a broader trend among South Korean battery firms, which are modifying electric vehicle plants or establishing new sites dedicated to energy storage in the US market. Industry observers link this trend to changing electric vehicle demand and recent legislative measures.

In a related development, the Ultium Cells joint venture between LG Energy Solution and General Motors is also converting a Tennessee electric vehicle battery plant to produce lithium iron phosphate cells for energy storage. This retooling project is based on an investment first outlined in 2021, with commercial production expected by the end of 2027. The venture had previously reduced its workforce due to slower electric vehicle sales but plans to recall those employees as it transitions to the new product line.

The agreement with Tesla was highlighted by the current administration of President Donald Trump during a recent international energy summit, framed within discussions on supply chain security for critical minerals. The summit also featured news of other energy infrastructure investments, including a coal power project.

Additionally, government agencies from the US and South Korea are reviewing a formal cooperation agreement to strengthen critical mineral supply chains. A separate US grant has been awarded to support a pilot project in Indonesia for extracting lithium from geothermal sources.

1. INTRODUCTION

Making Data-Driven Decisions to Grow Your Business

REPORT DESCRIPTION
RESEARCH METHODOLOGY AND THE AI PLATFORM
DATA-DRIVEN DECISIONS FOR YOUR BUSINESS
GLOSSARY AND SPECIFIC TERMS

2. EXECUTIVE SUMMARY

A Quick Overview of Market Performance

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3. MARKET OVERVIEW

Understanding the Current State of The Market and its Prospects

MARKET SIZE: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
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MARKET FORECAST TO 2035

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BEST-SELLING PRODUCTS
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UNSATURATED MARKETS
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8. IMPORTS

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10. PROFILES OF MAJOR PRODUCERS

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11.1

United States