<div id="readability-page-1"><div id="ArticleBody-InlineImage-108022768"><div><div><p>A Tesla Inc. Megapack battery after being placed into position at the Harmony Energy Ltd. and Fotowatio Renewable Ventures BV (FRV) battery energy storage project near Burgess Hill, U.K. on Tuesday, May 11, 2021.</p><p>Chris Ratcliffe | Bloomberg | Getty Images</p></div></div></div><div><p><span id="RegularArticle-QuoteInBody-1">Tesla<span><span id="-WatchlistDropdown"></span></span></span> is expanding ties with South Korea's LG Energy Solution, striking a deal to buy $4.3 billion worth of battery cells for energy storage systems that will be made in Lansing, Michigan.</p><p>The plant was formerly developed for a joint venture between LG and <span id="RegularArticle-QuoteInBody-2">General Motors<span><span id="-WatchlistDropdown"></span></span></span> before the automaker decided to retreat from that initiative in late-2024, selling its stake to LG as part of a pullback in the automaker's electric vehicle investments. </p><p>While Tesla still makes most of its revenue from EVs, the company is investing in its more rapidly growing energy business, as data centers drive up electricity demand. Tesla's Megapacks can store power produced using intermittent sources like solar or wind, or during off-peak hours, then make it available for use when demand is high. </p><p><span id="RegularArticle-QuoteInBody-4">Tesla<span><span id="-WatchlistDropdown"></span></span></span> currently sells Powerwall backup batteries for residential use with its solar installations, and much larger Megapack and Megablock systems for utility-scale power storage. Last year, revenue in the company's energy segment increased 27% to $12.8 billion, accounting for 13% of total revenue. Total revenue dropped due to a 10% decline in the auto business. </p><p>Details of the Tesla-LG partnership were announced during an Indo-Pacific Energy Security Summit in Japan, according to a release from the U.S. Department of the Interior. The Trump administration announced a total of $56 billion in private sector commitments at the event. </p><p>A spokesman with LG Energy Solution said the company &#34;will establish dedicated production lines at our Lansing facility to deliver on this agreement.&#34; LG last year retooled the facility to build LFP (Lithium Iron Phosphate) prismatic cells, later confirming a $4.3 billion deal with an unnamed company. </p><p>GM continues to have a significant presence in and around the Lansing battery plant, but the company has largely retrenched from the EV market, announcing $7.6 billion in related write-downs. </p><p>Tesla, meanwhile, expects its energy business to &#34;have very high growth for as far into the future as we can imagine,&#34; CEO Elon Musk said during the company's fourth-quarter earnings call in January. CFO Vaibhav Taneja cautioned that the energy segment expects &#34;margin compression&#34; from low-cost competition and the cost of tariffs. </p><p>Tesla's competition includes companies like BYD in China and climate-tech startups like Form, which is making iron air batteries and others. </p><p><strong>WATCH:</strong> Why the EV factory boom in the U.S. south is suddenly in trouble</p></div><div><p>Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.</p></div></div>

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<p>Tesla is expanding its partnership with LG Energy Solution by purchasing $4.3 billion worth of battery cells for energy storage systems to be produced in Michigan. This deal follows GM's withdrawal from a joint venture with LG, allowing Tesla to invest in its growing energy business, which saw a 27% revenue increase last year. The announcement was made during an Indo-Pacific Energy Security Summit, highlighting Tesla's focus on energy storage solutions amid competition in the market.</p>

- Tesla is expanding its partnership with LG Energy Solution, committing to a $4.3 billion purchase of battery cells for energy storage systems in Michigan.  
- This follows LG's acquisition of the production facility initially intended for a joint venture with GM, which has since retreated from the EV market.  
- Tesla's energy segment has seen a 27% revenue increase to $12.8 billion, driven by demand for their Megapacks, despite an overall decline in revenue from its automotive division.

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Tesla to buy $4.3 billion of LG Energy battery cells from disbanded GM plant