South Korea-based LG Energy Solution announced it has signed a $4.3 billion contract to supply batteries to a major corporation, though it has not disclosed the customer’s identity to maintain confidentiality. The contract became effective on Tuesday, with an initial term running through the end of July 2030, and carries an option for extension of up to seven additional years. Industry reports suggest Tesla is the likely counterparty.
This contract’s value exceeds LG Energy Solution’s second-quarter 2025 revenue of approximately $4.05 billion, highlighting the significance of the deal. The company’s filing with the Korea Exchange emphasized that contract details, including the total value, may change and advised investors to consider the potential for modifications or termination when making decisions. LG Energy Solution’s shares rose slightly by 0.26% following the announcement.
The filing did not specify whether the batteries involved are intended for electric vehicles or energy storage systems. LG Energy Solution is known for supplying batteries to prominent American electric vehicle makers such as Tesla and General Motors.
The company has been aggressively expanding its manufacturing footprint in the U.S., notably with the launch of its first North American energy storage system (ESS) battery manufacturing hub in Michigan during the second quarter of this year. Additionally, LG Energy Solution is building a lithium iron phosphate battery plant in Arizona, reflecting its strategic push into this battery segment.
This new deal is among LG Energy Solution’s largest lithium iron phosphate contracts to date and is expected to be linked to the Michigan facility, according to Liz Lee, an associate director at Counterpoint Research. She noted that although LG Energy Solution has trailed Chinese competitors in the lithium iron phosphate battery market for electric vehicles, this major U.S.-based ESS order signals growing traction within the U.S. energy storage sector.
If Tesla is confirmed as the contract partner, the agreement aligns with Tesla’s broader strategy to reduce dependency on Chinese suppliers for energy storage batteries, reinforcing its commitment to diversifying and localizing its supply chain.
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