US Confirms Tesla-LG $4.3 Billion Battery Plant in Michigan

The U.S. government confirmed on Monday that Tesla Inc. and South Korea's LG Energy Solution Ltd. have agreed to build a $4.3 billion lithium iron phosphate battery manufacturing facility in Lansing, Michigan, with production set to start in 2027.

The plant will produce prismatic battery cells with an annual capacity of 50 gigawatt-hours, according to a statement from the Department of the Interior. These American-made cells are intended to supply Tesla's Megapack 3 energy storage systems, which are assembled in Houston, Texas. The project aims to strengthen the domestic battery supply chain amid efforts to enhance energy security.

The announcement came as part of a broader update on outcomes from the Indo-Pacific Energy Security Ministerial and Business Forum held in Tokyo over the weekend. It marks the first public disclosure of Tesla as the customer in a battery supply deal that LG Energy Solution announced in July without naming the buyer. That initial agreement outlined a three-year contract, from August 1, 2027, to July 31, 2030, valued at approximately $4.3 billion, equivalent to a significant portion of the company's prior-year sales.

The facility represents a pivot for...