LG Energy Solution (LGES), a South Korean battery manufacturer, has signed a $4.3 billion agreement with Tesla. This deal aims to lessen Tesla's dependence on Chinese imports.
Battery Supply Agreement
LGES has become the primary supplier of batteries for Tesla's energy systems. The deal was officially announced on July 30. LGES will serve as a global distributor of LFP batteries for three years.
Production and Demand for LFP Batteries
The batteries will be produced at LGES’s facility in Michigan. Demand for electric vehicles has drastically decreased, and LGES plans to leverage this situation to increase its LFP battery sales.
South Korea's Business Expansion in the US
South Korean companies like LGES and Samsung are expanding their presence in the US. Samsung has secured a $16.5 billion deal with Tesla for chip supply. South Korea is also negotiating a trade agreement with the US to address the 25% tariffs on imports.
The LG Energy Solution deal with Tesla underscores key changes in the international battery supply chain, alongside South Korea’s business expansion in the US amid rising demand.
