LG Energy Solution's mega battery deal might involve supplies to Tesla

South Korean battery manufacturer LG Energy Solution announced a landmark battery supply contract on Wednesday.

Sources report that the batteries might be supplied to the U.S. tech giant Tesla.

Park Jun-han has more.

Leading battery manufacturer LG Energy Solution announced on Wednesday that it had signed a landmark 6 trillion won, or around 4-point-3 billion U.S. dollars, contract to supply lithium iron phosphate batteries for energy storage systems .

Although LG did not disclose the client's identity due to confidentiality obligations, Reuters reported that it is Tesla, the U.S.-based tech-driven automotive and energy company.

The three-year contract, starting on August 1, includes an option to extend it up to seven years with additional supplies.

This deal will likely bolster South Korea's leadership in the global battery industry, with LG positioned as the only Korean company producing LFP batteries for energy storage systems in North America.

Also, experts claim that LG is the only cell maker in the market capable of supplying more than 15 gigawatt-hours per year of LFP batteries in the United States.

LG, which operates major U.S. production sites in Ohio, Tennessee and Michigan, is considered a suitable company to benefit from rising U.S. tariffs on Chinese batteries — currently at around 41 percent and projected to exceed 58 percent next year.

The tariff has reduced the cost advantage of Chinese batteries, with prices expected to rise from the current 73 dollars per cell to 87 dollars by 2026.

As demand for non-Chinese battery suppliers in the U.S. grows, LG is accelerating its energy storage systems contracts, recently securing a 4-gigawatt-hour deal with Delta Electronics.

The company expects strong profit growth in the second half of 2025, driven by energy storage systems sales, amid a slowdown in EV battery demand.

Park Jun-han, Arirang News.