Tesla signs $4.3 billion deal with LG to boost energy storage push

Tesla has entered a $4.3 billion agreement with LG Energy Solution to supply battery cells for its expanding energy storage business. The batteries will be produced at LG’s Lansing, Michigan facility, which was originally a joint venture with General Motors but has since been retooled to manufacture lithium iron phosphate (LFP) prismatic cells. These domestically produced cells will power Tesla’s Megapack 3 energy storage systems made in Houston, supporting the company’s strategy to localize its battery supply chain and reduce reliance on imports, particularly from China. This move aligns with broader U.S. government efforts to boost domestic manufacturing and secure energy infrastructure amid rising electricity demand driven by data centers and electrification. Tesla’s energy storage division is growing rapidly, generating $12.8 billion in revenue last year and accounting for 13% of the company’s total revenue, even as its automotive segment faced declines. The Megapack systems help utilities store renewable energy and manage grid demand fluctuations. Meanwhile, LG Energy