Tesla is rumored to be behind a large $4 billion lithium-iron phosphate (LFP) battery cell order with Korea’s LG Energy Solution.
Yesterday, LG reported having secured a $4.3 billion order for LFP battery cells from its new factory in the US from August 2027 to July 2030.
The Korean company didn’t confirm the identity of the customer, but it did mention that the cells will be used in stationary energy storage products, which prompted many people to speculate that Tesla is behind the order.
Tesla currently produces Megapacks and Powerwalls in the US with LFP battery cells from China.
We previously reported that this is a problem amid the trade war between the US and China.
As of last year, a 25% tariff already applied to battery cells from China, but this increased to more than 80% under Trump before he paused some tariffs on China. It remains unclear where they will end up by the time negotiations are complete and the trade war is resolved, but many expect it to be higher.
Prior to Trump taking power, Tesla had already planned to build a small LFP battery factory in the US to avoid the 25% tariffs.
The automaker had secured older manufacturing equipment from one of its battery cell suppliers, CATL, and planned to deploy it in the US for small-scale production.
Tesla recently unveiled some images of the factory, which it claims is almost complete, but it is expected to be limited to less than 10 GWh of LFP battery cell production per year at full capacity, while Tesla produces more than 40 GWh of energy storage products per year in the US.
LG’s LFP battery cells made in the US would enable Tesla to close the gap between its own battery cell production and its Megapack and Powerwall production.
