Overview
- The Interior Department confirmed a three-year supply agreement under which LG Energy Solution will produce prismatic LFP cells in Lansing starting in 2027 for Tesla’s Megapack 3 units assembled in Houston.
- LG’s contract runs from August 1, 2027 to July 31, 2030, with options reported to extend the term by up to seven years.
- The Lansing facility, formerly an Ultium Cells joint venture site with GM that LG fully acquired in 2025, has about 50 GWh of annual capacity and will add dedicated LFP lines.
- The arrangement reduces Tesla’s exposure to Chinese LFP imports affected by U.S. tariffs and supports eligibility for domestic-content incentives.
- Shares of LG Energy Solution rose about 4% after the confirmation as Tesla slipped modestly, while analysts flagged conversion and timing risks and noted parallel industry pivots such as Ultium’s Tennessee retool and worker recall for ESS production.