LG Energy Solution announced a significant contract to supply lithium iron phosphate (LFP) batteries valued at 5.9442 trillion won ($4.3 billion). The deal represents 23.2% of its 2024 revenue but maintains client confidentiality, stating: "We cannot disclose the client's identity due to contractual obligations."

Industry insiders identified Tesla as the buyer, with batteries destined for energy storage systems produced at LG's US facilities. Tesla did not immediately respond to requests for comment. While LG's key clients include Tesla and GM, the announcement didn't specify whether these LFP batteries target automotive or energy storage markets—both critical growth drivers.

LFP batteries gain popularity over nickel-based alternatives due to lower costs, enhanced safety, and longer lifespan, making them attractive for EVs and renewable energy projects.

The three-year contract commenced August 1st following its July 29th signing, featuring provisions for potential extension to seven years with increased volume, allowing future adjustments to value and duration. This agreement emerges as companies navigate tariff challenges, with LG being a key US-based LFP producer since starting Michigan output in May. The deal underscores LG's aggressive strategy to secure long-term supply contracts amid intensifying global battery competition.

This follows Samsung Electronics' recent $16.5 billion chip supply pact with Tesla for AI processors. Elon Musk confirmed Samsung's Texas "gigafab" will produce Tesla's next-gen chips, noting the strategic partnership and his personal oversight. These deals highlight deepening ties between Korean tech giants and the EV sector.