Tesla and LG Energy Solution are moving deeper into the fast-growing energy storage sector with plans to build a $4.3 billion battery manufacturing facility in Lansing, Michigan, dedicated to producing lithium-iron-phosphate cells for Tesla’s Megapack 3 systems.
According to the U.S. Department of the Interior, the plant is expected to begin production in 2027 and will supply cells for Megapack 3 units assembled at Tesla’s Houston-area Megafactory.
Neither Tesla nor LG responded immediately to requests for comment, but the announcement aligns with Tesla’s broader strategy to scale up its energy generation and storage business as demand continues to rise.
That momentum is already visible in the company’s numbers. During Tesla’s Q4 2025 earnings call, CFO Vaibhav Taneja said the energy generation and storage segment closed the year with nearly $12.8 billion in revenue, representing a 26.6% year-over-year increase. He attributed the growth to stronger deployments across all regions and continued demand for both Megapack and Powerwall systems.
Tesla has also signaled that Megapack 3 and Megablock production at its Houston site is scheduled to begin this year, giving the company a broader manufacturing base as project pipelines grow.
For LG Energy Solution, the agreement also fits a wider strategy to expand its presence in stationary storage. The company said in its 2025 financial results that it expects to secure 90GWh of new grid-scale and other energy storage system orders this year, while increasing production capacity to more than 60GWh. LG also aims to locate over 80% of its energy storage systems production capacity in North America.
The Michigan project comes at a time when LG is balancing its battery business between the automotive and stationary energy segments. The company continues to maintain major carmaker partnerships, including multi-year EV battery supply deals with Mercedes-Benz, although it also faced a setback when Ford canceled a $6.5 billion battery supply contract last year amid a strategic pullback from electric vehicles.
The Tesla-LG partnership was announced within a broader package of industrial commitments designed to strengthen US critical energy supply chains. The Interior Department said the overall package included $56 billion in private-sector commitments, following the Indo-Pacific Energy Security Ministerial and Business Forum, which brought together leaders from 17 countries along with representatives from the Trump administration.
Alongside the Tesla-LG investment, the broader initiative also included commitments in liquefied natural gas expansion, nuclear energy, coal-based power and fuel technologies, underscoring Washington’s effort to reinforce domestic and allied energy manufacturing capacity.
