LG Energy Solution (LGES), a leading South Korean battery manufacturer, has signed a major deal with Tesla worth $4.3 billion, making LGES a key supplier of lithium iron phosphate (LFP) batteries for Tesla’s energy storage systems. The agreement marks a strategic shift for Tesla as it aims to reduce its dependency on Chinese imports amid looming tariff threats from President Donald Trump.

According to sources familiar with the matter, the batteries will be produced at LGES’s plant in Michigan, USA.

South Korea Expands Business Amid U.S. Demand Surge

LGES officially announced the multi-billion-dollar deal on July 30. The agreement guarantees deliveries for over three years. While the company did not disclose the client's name or the batteries' end use, speculation suggests they may be utilized in both vehicles and energy storage applications.

With demand for electric vehicles declining since the second half of last year, LGES is leveraging the situation to boost LFP battery sales in the U.S. and solidify its position as a global battery supplier. Meanwhile, the growing number of AI-driven data center projects has created strong new demand for reliable power storage – a major growth opportunity.

When questioned about the anonymous client, LGES cited contractual confidentiality. Tesla declined to comment.

Tesla Rethinks Strategy Over Tariff Risks

Tesla CFO Vaibhav Taneja has previously warned that Trump’s tariff threats are hurting the company’s business and revenues. Most of Tesla’s LFP batteries originate from China, a key U.S. trade partner, now facing increasing restrictions.

This new agreement with LGES is a logical step: by sourcing batteries produced domestically, Tesla avoids tariff exposure. Recently, Tesla also signed a massive $16.5 billion chip supply deal with Samsung – another South Korean company – underlining the rising importance of Korean firms in Tesla’s supply chain.

South Korea Moves to Prevent Tariff Fallout

South Korea is actively negotiating with the U.S. to prevent the 25% import tariff scheduled for August 1. In a show of urgency, three government officials met with U.S. Secretary of Commerce Howard Lutnick to seek common ground.

Although Chinese companies still dominate LFP battery production globally, they face increasing challenges entering U.S. markets. LGES is one of the few players with enough local infrastructure to step in.

The company launched its first U.S. plant in Michigan this May and now plans to expand production lines for energy storage systems — a pivot from EV batteries amid persistent market weakness.


#Tesla , #Tariffs , #Musk , #Technology , #worldnews

Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!

Notice:

,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“