The U.S. government has officially announced an agreement between Tesla and LG Energy to construct a $4.3 billion lithium iron phosphate (LFP) prismatic battery cell factory in Lansing, Michigan, with production starting in 2027. These American-made cells will power Tesla's Megapack 3 energy storage systems produced in Houston, bolstering the domestic supply chain.
The U.S. Department of the Interior stated, “American-made cells will power Tesla's Megapack 3 energy storage systems produced in Houston, creating a robust domestic battery supply chain.” This announcement highlights efforts to expand U.S. manufacturing capabilities for advanced energy storage solutions. Production at the new Lansing facility is slated to begin in 2027, focusing on LFP prismatic cells designed for Tesla's next-generation products. Tesla's Houston Megafactory will manufacture Megapack 3 units starting late 2026, aiming for 50 GWh annual capacity at full ramp-up. Each Megapack 3 offers 5 MWh of usable AC energy, weighs 86,000 lbs, and features a 28-foot-long enclosure suitable for global shipping. It is optimized for up to 8-hour applications and incorporates a simplified thermal bay with 78% fewer connections, using an enhanced Model Y heat pump design. The unit employs larger 2.8-liter LFP battery cells co-engineered with Tesla's team, where 75% of its mass consists of battery cells—a single module matching a Cybertruck's weight. It operates from -40°C to 60°C and reduces connections from 24 in the prior version to three busbar links. Complementing this, Tesla's Megablock integrates Megapack 3 into a plug-and-play medium-voltage system, 23% faster to install with up to 40% lower costs. It eliminates above-ground cabling via flexible busbar assembly, achieves 91% MV round-trip efficiency, and delivers 20 MWh usable AC energy across 248 MWh per acre. Rated for 25 years and over 10,000 cycles, Megablock targets commissioning 1 GWh in 20 business days, enough to power 400,000 homes.
