Key facts
- LG Energy Solution has opened a $2 billion lithium-ion battery plant in Lansing, Michigan.
- The facility will primarily produce battery cells for LG Energy Solution Vertech and Tesla's Energy Storage Systems.
- The plant has a capacity of 50 GWh per year and is being retooled to focus on LFP batteries for Tesla.
- Mass production of LFP cells for Tesla is anticipated to start in the second half of 2027.
- Domestic sourcing of these batteries supports Tesla's U.S. operations and Inflation Reduction Act tax credits.
LG Energy Solution has officially opened its approximately $2 billion lithium-ion battery manufacturing facility in Lansing, Michigan. The plant, which experienced a six-month delay due to a slowdown in U.S. electric-vehicle demand, is set to become a key supplier for both LG Energy Solution Vertech and Tesla's rapidly growing energy storage business.
The Lansing facility boasts a significant annual production capacity of 50 GWh. A substantial portion of its production lines are being converted to exclusively manufacture Lithium Iron Phosphate (LFP) battery cells for Tesla's Energy Storage Systems, including Megapacks and Powerwalls, which are seeing unprecedented demand. LG has already placed orders for the necessary LFP equipment to facilitate this transition.
Mass production of these LFP cells for Tesla is projected to commence in the second half of 2027. This move aligns with Tesla's strategy to vertically integrate LFP production in North America, reducing reliance on imported cells and mitigating geopolitical supply chain risks. LFP batteries are favored for stationary storage applications due to their durability, safety, and cost-effectiveness, as they do not require expensive minerals like cobalt and nickel and have a lower risk of thermal runaway.
The domestic sourcing of these batteries will enable Tesla's customers to fully benefit from tax credits under the U.S. Inflation Reduction Act. This partnership is crucial for ensuring a stable supply of cells to meet the surging demand for Tesla's energy storage solutions.