Electric vehicle (EV) giant Tesla has reportedly signed a US$4.3 billion (approximately RM20.21 billion) deal with LG Energy Solution Ltd for the supply of lithium iron phosphate (LFP) batteries. The agreement marks a strategic move by Tesla to reduce its reliance on China’s CATL, currently the world’s largest battery manufacturer.
Under the terms of the deal, LG Energy Solution will supply LFP batteries to Tesla starting August 2027 through July 2030. The contract also includes provisions to extend the supply agreement for up to seven additional years and to scale up battery volume as needed.
However, neither Tesla nor LG Energy Solution has officially revealed how the batteries will be used or which Tesla models they will feature in. Nevertheless, The Korea Economic Daily reports that the batteries are likely intended for Tesla’s energy storage system (ESS) devices, rather than its vehicles.
This aligns with the fact that LG Energy’s manufacturing plants in the U.S.—located in Ohio, Tennessee, and Michigan—are primarily focused on producing LFP batteries optimised for ESS applications. Nevertheless, we will have to wait whether they will be featured in any upcoming models.
On the other hand, this isn’t Tesla’s first collaboration with a South Korean company. Just a few days ago, Tesla signed a multiyear chip deal with tech giant Samsung. Under this agreement, Samsung will manufacture Tesla’s upcoming A16 chip at its new semiconductor fabrication plant in Taylor, Texas—often referred to as the “giant new Texas fab,” which Samsung announced back in 2021. Furthermore, according to reports and a post by Elon Musk, Samsung is already producing Tesla’s current A14 chip.
(Source: The Korea Economic Daily)
