Tesla and LG Energy to Build $4.3 Billion Battery Plant in Michigan

Tesla and LG Energy will jointly build a battery plant in Michigan that will cost $4.3 billion. Production is slated to begin next year, the Department of the Interior said in a statement. The facility will have an annual capacity of 50 GWh.

“American-made cells will power Tesla's Megapack 3 energy storage systems produced in Houston, creating a robust domestic battery supply chain,” the statement also said.

The initial news reports about the battery plant last July came less than a week after LG Energy warned about slowing EV battery demand because of the tariffs that President Trump was imposing on trade partners around the world. The company also named the Trump administration’s phaseout of EV subsidies as a factor that will drive lower demand for batteries over the short term.

Indeed, the phaseout of EV subsidies in the United States led to a slump in EV sales. The latest data shows that in January, new EV registrations in the country dropped by 41%, pushing EVs’ market share down from 8.3% in January 2025 to 5.1% this year, InsideEVs reported. The Michigan plant that LG Energy and Tesla will build was originally planned to produce EV batteries.