US Confirms Tesla–LG Energy Solution’s $4.3 Billion LFP Battery Plant In Michigan

Authored by Evgenia Filimianova via The Epoch Times (emphasis ours),

The U.S. government has confirmed that Tesla and South Korea’s LG Energy Solution have signed a supply agreement to build a $4.3 billion lithium iron phosphate (LFP) battery cell factory in Michigan.

The project, to be located in Lansing, is expected to begin production in 2027, according to a March 16 statement by the U.S. Department of the Interior.

“Tesla and LG Energy Solution are expanding their partnership with a supply agreement to build a $4.3 billion LFP prismatic battery cell manufacturing facility in Lansing, Michigan, launching production in 2027,” the statement said.

“American-made cells will power Tesla’s Megapack 3 energy storage systems produced in Houston, creating a robust domestic battery supply chain.”

The announcement was included in the results from the Indo-Pacific Energy Security Ministerial and Business Forum held in Tokyo over the weekend.

The deal was one of several investments highlighted by the Trump administration at the forum as part of its “American energy dominance” agenda.

In July 2025, LG Energy Solution said it had signed an LFP battery supply deal with an overseas client, but did not name the buyer.

The Korean battery maker said in its July 25, 2025, quarterly results that it had begun producing batteries at its first North American energy storage manufacturing hub in Michigan and planned to expand capacity further.

“By proactively adjusting its capacity expansion plans, the company now aims to expand its annual production capacity for ESS [energy storage systems] batteries to 17GWh by the end of this year,” LG said in July.

In the same statement, the company said it plans to continue expanding its ESS business in North America and aims to secure more than 30 GWh of annual production capacity in the region by the end of 2026.

In financial results released on Jan. 29, LG Energy Solution CFO Chang Sil Lee said the company had seen strong growth in energy storage sales even as electric-vehicle demand slowed.

He added that profitability improved due to a better product mix, lower material costs, and production incentives tied to stable North American sales.

Domestic Supply

The Michigan factory’s output will feed Tesla’s Megapack 3 systems, large integrated batteries designed to store electricity and stabilize power grids.

Tesla says Megapack stores energy when supply is high and releases it when demand rises, helping balance renewable generation and prevent outages.

Megablock systems using Megapack 3 are designed for 20 megawatt-hours of alternating current capacity with a 25-year life and more than 10,000 charge cycles, Tesla said in a Sept. 9 post on X, adding that deliveries will start in the second half of 2026.

The Tesla-LG project was announced alongside other initiatives aimed at strengthening U.S. energy exports and supply chains.

Among them, the Export-Import Bank issued a term sheet for the $14 billion Delfin LNG project, an offshore liquefied natural gas facility planned off Louisiana with a capacity of about 13 million metric tons per year.

The Interior Department also said the United States and South Korea are exploring a memorandum of understanding on critical minerals through the Department of Energy to bolster supply chain resilience.

The Tokyo forum generated more than $56 billion in announced investments across sectors, including nuclear energy, liquefied natural gas infrastructure, critical minerals, advanced manufacturing, and clean energy technologies, the department said.

Commenting on the deals, Interior Secretary Doug Burgum said in a March 16 post on X, “American Energy Dominance continues to deliver historic investment into the U.S. economy.”