Justin Sullivan/Getty Images News
Tesla (NASDAQ:TSLA) has reached a $4.3 billion agreement with South Korean battery manufacturing company LG Energy Solution to procure lithium iron phosphate (LFP) batteries, according to multiple published reports citing a source familiar with the matter.
This marks Tesla’s second major partnership in South Korea this month.
The LFP batteries will be produced at LG’s manufacturing facilities in the U.S., but they won’t be used in vehicles. Instead, the source said the batteries are intended for energy storage systems.
The contract will reportedly last from August 2027 to July 2030.
The reported deal comes as Tesla seeks to reduce its dependence on Chinese suppliers amid rising tariffs and regulatory challenges. It also follows a separate $16.5 billion chip contract between Tesla and Samsung Electronics (OTCPK:SSNLF), signaling deepening ties between the EV maker and South Korean firms.