Tesla is rumored to be behind LG’s $4 billion LFP battery cell order

A rendering of LG Energy Solution’s Stand-Alone Battery Manufacturing Complex Project in Arizona / Source: LG Energy Solution

Tesla is rumored to be behind a massive $4 billion lithium-iron phosphate (LFP) battery cell order with Korea’s LG Energy Solution. Yesterday, LG reported securing a $4.3 billion order for LFP battery cells from its new US factory, with deliveries scheduled from August 2027 to July 2030.

Although LG didn’t confirm the customer’s identity, it mentioned that the cells will be used in stationary energy storage products, sparking speculation that Tesla is the buyer. Tesla currently produces Megapacks and Powerwalls in the US using LFP battery cells from China.

However, the ongoing trade war between the US and China has created uncertainty around battery cell tariffs. A 25% tariff already applies to Chinese battery cells, and this may increase further. To mitigate this, Tesla had planned to build a small LFP battery factory in the US to avoid tariffs.

Tesla recently unveiled images of the factory, claiming it’s almost complete. However, the factory’s production capacity is expected to be limited to less than 10 GWh per year, while Tesla produces over 40 GWh of energy storage products annually in the US. LG’s US-made LFP battery cells could help Tesla bridge this production gap.