·4 min read
Energy & Infrastructure
← Back to Blog
Tesla Energy Secures US-Made LFP Battery Deal With LG: 50 GWh Lansing Plant | Taha Abbasi
Taha Abbasi··4 min read
Tesla Energy Secures Massive US Battery Supply Deal With LG
Technology executive Taha Abbasi reports that Tesla’s fastest-growing business just got a major supply chain boost. According to South Korean media reports, LG Energy Solution has struck a deal to manufacture LFP (Lithium Iron Phosphate) batteries specifically for Tesla’s energy storage systems — and critically, these cells will be built in the United States at LG’s massive facility in Lansing, Michigan.
The Lansing plant boasts a total production capacity of 50 GWh per year, making it one of LG Energy Solution’s largest battery plants in all of North America. To accommodate Tesla’s energy storage demands, LG is actively converting a significant portion of the factory’s production lines to focus exclusively on LFP cells for Tesla. Mass production is expected to begin in the second half of 2027.
Why LFP for Energy Storage Makes Perfect Sense
The choice of LFP chemistry for energy storage systems is strategically brilliant. As Taha Abbasi has covered extensively, LFP batteries offer several critical advantages for stationary storage applications: longer cycle life (often 3,000-5,000 cycles versus 1,000-2,000 for NMC), better thermal stability (lower fire risk), lower cost per kilowatt-hour, and no dependence on expensive cobalt or nickel.
For Megapacks and Powerwalls — where energy density is less critical than in vehicles because weight isn’t a primary concern — LFP is arguably the ideal chemistry. Tesla has already been using CATL-supplied LFP cells in its energy products, but sourcing them from a US manufacturer eliminates supply chain risks, tariff concerns, and qualifies the products for domestic content incentives.
Tesla Energy: The Quiet Juggernaut
While Tesla’s automotive business dominates headlines, the energy division has quietly become a powerhouse. In 2025, Tesla Energy deployed record numbers of Megapacks and Powerwalls, with the segment growing faster than any other part of the company. The Megapack business alone has attracted utility-scale customers worldwide, with deployments in Australia, the UK, Texas, and California driving grid stability and renewable energy integration.
The Texas Megafactory expansion and the Lathrop, California manufacturing facility are already running at significant capacity. Adding LG’s Lansing production to this supply chain creates redundancy and scale that competitors will struggle to match.
The Domestic Manufacturing Advantage
Taha Abbasi notes that the US-made component is particularly significant given the current trade environment. With tariffs on Chinese batteries creating cost pressures for companies relying on CATL and BYD supply chains, Tesla’s move to secure domestic LFP production is a strategic hedge that addresses multiple risks simultaneously.
The Inflation Reduction Act’s domestic content requirements for energy storage tax credits make this even more compelling. US-manufactured LFP cells would help Tesla’s Megapack and Powerwall products qualify for maximum incentive values, improving the economics for both Tesla and its customers.
Adding to an Already Impressive Supply Chain
This isn’t Tesla’s only LFP initiative. The company’s own LFP plant, which has been in development alongside its existing battery manufacturing at Giga Nevada and Giga Texas, represents another pillar of its energy storage supply strategy. By diversifying across its own production, LG’s US facilities, and potentially other suppliers, Tesla is building a battery supply chain with the resilience and scale needed to meet what appears to be exponentially growing demand.
The energy storage market is projected to grow from approximately 100 GWh of annual deployments in 2025 to over 500 GWh by 2030. Tesla’s aggressive supply chain investments position it to capture a significant share of this growth while maintaining the cost advantages that come from scale.
What This Means for the Energy Transition
The broader significance extends beyond Tesla’s balance sheet. As Taha Abbasi has consistently argued, battery energy storage is the linchpin of the renewable energy transition. Solar and wind are now the cheapest sources of new electricity generation, but their intermittency requires massive storage deployment to ensure grid reliability.
Every additional gigawatt-hour of US-manufactured LFP cells accelerates this transition by improving supply chain security, creating manufacturing jobs, and reducing costs through scale. LG’s decision to convert significant Lansing capacity to Tesla’s LFP production is a vote of confidence in the energy storage market’s growth trajectory and Tesla’s position within it.
For investors and industry watchers, Taha Abbasi sees this deal as further confirmation that Tesla Energy could eventually rival or exceed the automotive business in both revenue and profitability. The combination of global distribution deals, expanding manufacturing, and growing demand creates a flywheel effect that is just beginning to accelerate.
🌐 Visit the Official Site
About the Author: Taha Abbasi is a technology executive, CTO, and applied frontier tech builder. Read more on Grokpedia | YouTube: The Brown Cowboy | tahaabbasi.com
Taha Abbasi
Engineer by trade. Builder by instinct. Explorer by choice.
