Tesla has reached a $4.3 billion agreement with South Korea’s LG Energy Solution to secure lithium iron phosphate batteries for its grid-scale energy storage systems, according to people familiar with the matter. The deal marks the electric-vehicle maker’s second major supply pact with a South Korean firm this month, following a $16.5 billion semiconductor contract with Samsung Electronics. LG Energy said in a regulatory filing that it will supply LFP batteries globally over a three-year span running from August 2027 through July 2030. The customer was not identified, but sources confirmed it is Tesla. The batteries will be produced at LGES’s factory in Michigan, and the contract includes an option to extend the term by as much as seven years and boost volumes pending further negotiations. The arrangement allows Tesla to diversify its battery supply chain away from China, where a 145% U.S. tariff on imported goods has raised costs for components such as LFP cells. LGES began U.S. production of the chemistry in May and has said it may convert additional lines to serve growing demand for stationary storage as electric-vehicle sales cool.