Tesla Signs $4.3 Billion Battery Deal With LG, Ends China Dependency

Tesla has secured a $4.3 billion agreement with South Korea’s LG Energy Solution to supply lithium iron phosphate batteries for its electric vehicles. The deal, undisclosed by both parties, marks a strategic shift away from Chinese suppliers amid rising trade tariffs. LG will ship the batteries to Tesla’s Michigan plant, with the partnership expected to last through 2030.

The MOVE reduces Tesla’s reliance on China, which dominates the global EV battery market. Trade tensions and tariffs have made Chinese imports less economical, prompting manufacturers to seek alternatives. LG’s foothold in the U.S. remains limited, but this deal could signal a broader realignment in supply chains.

Neither Tesla nor LG publicly confirmed the arrangement, though Reuters cited anonymous sources familiar with the matter. LG emphasized client confidentiality in its response, while Tesla declined to comment.