The U.S. government on Monday said electric vehicle (EV) maker Tesla and South Korea’s LG Energy Solution had signed a ‌supply agreement to build a $4.3 billion lithium iron phosphate (LFP) prismatic battery cell manufacturing facility in Lansing, Mich., with an expected production launch ​in 2027.

“American-made cells will power ​Tesla’s Megapack 3 energy storage systems produced in Houston, creating a robust domestic battery ​supply chain,” the U.S. Department of the ⁠Interior said in ⁠a statement on ‌Monday.

The new Tesla agreement was part of a broader statement on deals highlighted by President Donald Trump’s administration from the  Indo-Pacific Energy Security Summit.

A ⁠source told Reuters in July that LG Energy Solution had signed a $4.3 billion US deal to supply Tesla ‌with energy storage system batteries as the U.S. company looked to reduce its reliance on Chinese imports due to tariffs.

At the time, ​the South Korean company said it had signed a $4.3 billion US ⁠contract to supply LFP batteries over three ⁠years globally, without identifying the customer or saying if ⁠they would ⁠be used ​in vehicles or energy-storage systems.

LG Energy Solution is one ​of the ⁠few producers of LFP batteries in the U.S. The LFP battery chemistry has long been dominated by Chinese rivals that have little presence in the U.S. market. 

The South Korean also company owns NextStar Energy across the border in Windsor, Ont. It’s a similar battery cell factory, and used to be a joint venture with LG and Stellantis until the automaker recently sold its half of the company to LG, making it the sole owner.

The Canadian plant is heavily subsidized by the Ontario and Canadian federal government. NextStar was supposed to mainly feed the EV battery market but has since pivoted to prioritize energy storage amid a weak EV market. However, it can still produce batteries for both.