LGES Bags $4.3B Contract to Supply Lithium Batteries to Tesla

On 30 July 2025, LG Energy Solutions (LGES) announced that it has finalized a USD 4.3 billion deal to supply lithium iron phosphate (#LFP) batteries to a large foreign client. The batteries will be produced by the US subsidiary of #LGES.

Observers deducted that the foreign client is most likely Tesla and the deal arose as a result of rising tariffs against China and to reduce reliance on Chinese supply chains in the key future industry of Electric Vehicles (EV). In particular, China’s Contemporary Amperex Technology (#CATL) is the top global manufacturer of lithium batteries and Tesla is one of its top customers.

As per the contract, #LGES will start battery delivery to Tesla from August 2027 through to July 2030. Currently, the contract value is roughly equivalent to its sales in one quarter. The supply agreement includes a clause for an optional extension up to seven years and to adjust the quantity as per prevailing market conditions. As a value, the contract value and duration may be subject to change.

LGES has manufacturing facilities in Ohio, Tennessee and Michigan states. LGES and General Motors have formed a JV Motors called Ultium Cells in Spring Hill, Tennessee, which is planning to convert from #nickel cobalt manganese (#NCM) to #lithium iron phosphate (LFP) technology as LFP is the favored chemistry for #EV at the moment.

In March 2025, LGES partnered with Taiwan-headquartered Delta Electronics to supply 4 GWh of batteries to be deployed as Energy Storage Systems (#ESS) for residential use. On a related note, Samsumg also clinched a USD 16.5 billion deal to supply chips to Tesla.