In a major move to reduce dependence on Chinese imports, South Korea’s LG Energy Solution (LGES) has reportedly secured a $4.3 billion deal to supply Tesla with lithium iron phosphate (LFP) batteries for energy storage systems. As the U.S. ramps up tariffs on Chinese goods, the agreement marks a strategic pivot for Tesla, which has heavily relied on China for its battery needs.
Reuters disclosed that neither company has confirmed the deal publicly, but a source familiar with the matter said that the LFP batteries will be produced at LGES’s Michigan factory, which recently began production.
The contract, among LGES’s largest to date, will run from August 2027 through July 2030, with an option to extend for up to seven additional years and increase volumes based on future discussions.
LG Energy Solution’s (LGES) Power Shift: From EVs to Energy Storage
CNBC reported that LG Energy Solution had earlier disclosed a $4.3 billion contract to supply LFP batteries globally over three years, but did not name Tesla as the customer or clarify whether the batteries would be used for electric vehicles or energy storage systems (ESS). However, growing signals point to Tesla’s booming energy business as the likely focus.
With EV demand slowing, LGES has shifted gears toward energy storage. The company is betting on a surge in demand fueled by the rapid expansion of AI data centers and renewable energy installations.
Liz Lee, Associate Director at Counterpoint Research, confirmed to CNBC that the deal is expected to be closely linked to LGES’s Michigan facility, which now serves as its first North American ESS battery manufacturing hub.
This strategic shift comes as LGES considers repurposing some of its U.S. EV battery lines for ESS production in response to weakening EV market dynamics.

Strong Q2 2025
The company recently posted solid second-quarter earnings for 2025, even without North American production incentives. The company reported revenue of KRW 5.6 trillion, down 11.2% from the previous quarter. However, operating profit surged 31.4% to KRW 492.2 billion, with an 8.8% margin. Notably, North American incentives contributed KRW 490.8 billion to the operating profit.
CFO Chang Sil Lee stated,
“In the second quarter, we secured stable EV battery sales and also started production at our new ESS battery facility in North America. However, constrained customer purchase sentiment, coupled with the reflection of metal price decline to our average selling price (ASP), affected our quarterly revenue.”
Moving forward, LGES anticipates a short-term slowdown in EV demand due to new tariffs and cost pressures on automakers. Yet, the company remains optimistic about mid- to long-term growth, driven by advances in autonomous driving and energy storage.
To adapt to this shift, it is focusing on maximizing output at existing production lines, particularly for ESS batteries. It plans to expand its annual production capacity for ESS to 17 GWh by year-end. The company also aims to reduce fixed costs by scaling back investments while securing a competitive supply chain.
Sustainability Goals
Beyond profits, the company is committed to achieving carbon neutrality across its value chain by 2050. One major step involves converting 100% of its power use across all global sites to renewable energy by 2030.
LGES is also working on creating a closed-loop battery ecosystem. With millions of tons of used EV batteries piling up, the company is actively exploring ways to reuse them for energy storage and recycle production waste. These initiatives aim to minimize environmental harm while securing critical raw materials.

- READ MORE: The Battery Shift: How Energy Storage Is Reshaping the Metals Market with LFPs Taking Charge
Tesla’s Push for U.S.-Made Batteries Gains Momentum
The global battery market is shifting rapidly, driven by policy changes like the U.S. Inflation Reduction Act (IRA) and similar initiatives in Europe and the UK. These regulations are encouraging companies to diversify supply chains and reduce reliance on Chinese suppliers. For LG Energy Solution (LGES), this creates a clear advantage. With operational plants in Michigan and an upcoming facility in Arizona, LGES is well-positioned to meet growing U.S. demand while staying aligned with evolving trade rules.
China has long dominated the lithium iron phosphate (LFP) battery space, but LGES is emerging as one of the few manufacturers building significant LFP production capacity on American soil. Its Michigan plant began operations in May, and the Arizona plant is set to further strengthen its U.S. presence.
CEO Elon Musk reinforced the importance of this shift, noting that energy demand is booming despite ongoing tariff and supply chain pressures.
He said during the company’s latest earnings call,
“Not many people realize just how massive battery demand has become.”
While Tesla plans to open its own LFP cell manufacturing facility in Nevada by the end of the year, it’s expected to cover only a fraction of the company’s overall battery needs. That’s where LGES comes in.
Its new U.S.-based capacity provides Tesla with a critical, non-Chinese alternative. The partnership aligns perfectly with Tesla’s goal to localize its battery supply chain—offering both strategic location and advanced manufacturing capability.
Battery Demand Powers Growth Outlook
Tesla’s energy generation and storage division, which includes its Megapack and Powerwall products, continues to play a growing role in its business. Despite overall revenue falling 12% in Q2 2025 to $22.5 billion, the energy segment generated more than $2.8 billion. However, this was a 7% year-over-year drop due to pricing pressure and supply chain challenges.
Still, the segment stands out as a growth area amid softening EV sales. Tesla has stressed that battery demand is growing at an unprecedented pace, making partnerships like the one with LGES essential to scaling operations.

The Rise of Solid-State Batteries
As lithium-ion battery innovation continues, solid-state batteries are emerging as the next frontier in battery technology. These advanced batteries utilize solid ceramic or polymer electrolytes, providing enhanced safety, higher energy density, and longer lifespan.
The global solid-state battery market is expected to grow from $0.26 billion in 2025 to $1.77 billion by 2031, with a projected CAGR of 37.5%, according to MarketsandMarkets.
Solid-State Battery Market Size

Solid-state batteries are ideal for electric vehicles, medical devices, and industrial sensors due to their resistance to leakage and thermal runaway. Primary solid-state batteries, commonly used in smart packaging, RFID tags, and medical patches, will likely dominate the market in the short term.
North America is set to lead in both research and commercialization. U.S. companies like Solid Power, QuantumScape, Sakuu Corporation, and Excellatron are spearheading innovation, with Mercedes-Benz and Factorial Energy collaborating on a technology that could offer EVs over 600 miles of range on a single charge.

Other major players like ProLogium (Taiwan), Ilika (UK), and Blue Solutions (France) are also advancing the global rollout of solid-state battery technologies, signaling a strong future for energy storage innovation.
The LGES-Tesla deal signals a major shift in the energy market. As EV demand slows and energy storage rises, resilient, tariff-friendly supply chains and advanced battery tech are taking center stage. With new U.S. plants and strong sustainability goals, LGES is emerging as a key player in powering Tesla’s energy growth amid global trade and policy shifts.
The post Is Tesla (TSLA) Securing U.S. Battery Independence with $4.3 B LG Energy Solution Deal? appeared first on Carbon Credits.
Carbon Footprint
McKibben opts for a small-tent climate movement
A few months ago I went to a climate change forum at the Center for Brooklyn History. The panel I attended, “Confronting Climate Change: Understanding Deniers,” featured the prominent climate activist, Bill McKibben.
Bill McKibben. Courtesy https://billmckibben.com/.
I was curious to hear McKibben’s take on climate change deniers. I don’t regard the true deniers as a big problem – they’re only 11-15% of our country, according to most polls. Rather, I wondered if McKibben would label as “climate deniers” people who agree that climate change is a significant problem but disagree with his framing and his proposed solutions. I have worked for decades on energy and climate matters as an energy lawyer. Now, more than ever, I believe that to address climate change we need to build a big tent.
In the Q&A I tested where McKibben is on this by asking if he would label as a climate denier someone who subscribes to the main tenets of climate change science yet holds that natural gas has a role to play as a bridge fuel. (Our exchange starts at 1:12:45 of the video.)
This could have been a chance for McKibben to make clear that such a view isn’t climate denialism, even if he feels it’s misguided. But he punted, saying “I don’t care whether they’re deniers or not.” For good measure, he threw in his long-standing refrain that swapping coal for natural gas makes climate change worse, despite coal’s far higher carbon content per unit of energy.
674-MW methane-powered generating station, Salem, MA.
As you can hear in the recording, McKibben’s claim that gas is worse than coal draws on the work of Cornell scientist Robert Howarth. Yet McKibben didn’t mention that Howarth’s work is controversial and disputed by many scientists. The crux of the dispute is whether methane’s impact on warming should be measured with a 20-year or 100-year time frame.
Methane is a relatively short-lived greenhouse gas, with a lifetime of around 10 years, versus the 100-year life applicable to carbon dioxide. But each ton of methane is far more potent while in the atmosphere, trapping roughly 100 times as much heat as a ton of CO2. These cross-cutting facts about atmospheric methane — shorter life but greater potency than CO2 — have resulted in two opposing camps: one insisting on a 20-year timeframe for greenhouse gas accounting, the other adhering to the established 100-year frame. This matters because with a 20-year timeframe, generating electricity with natural gas (which, chemically speaking, is essentially all methane) is more damaging to climate than coal-fired electricity.
McKibben blew past this dispute. To hear him at the Center for Brooklyn History, one would have no inkling that there’s an active disagreement over which timeframe to use, that there are staunch climate activists who favor the 100-year time frame, and that the Intergovernmental Panel on Climate Change (IPCC) generally uses the 100-year timeframe.
McKibben’s latest (2025) book. Published by W.W. Norton & Company.
McKibben also insisted that a discussion about natural gas’s potential role in mitigating climate change as a replacement for coal is irrelevant because solar “is now our cheapest resource.” McKibben’s claim, of course, suffuses “Here Comes the Sun,” his 2025 book that extols solar power as the cheapest solution for all of our energy needs. But this too is questionable, because it’s based on cost comparisons between solar farms and natural gas power plants (or nuclear power plants) that fail to consider that electricity supply and delivery is a complex system of wires and plants rather than individual power plants. Based on his remarks, McKibben is choosing to ignore studies such as the comprehensive 2025 report from the Clean Air Task Force that concluded that plant-level cost comparison “is a good metric to track historical technology cost evolution [but] is not an appropriate tool to use in the context of long-term planning and policymaking for deep decarbonization.” And the task force is not alone in finding that when electricity is treated as a system, solar loses its place as the cheapest low-carbon resource.
The dogmatism McKibben displayed at the Brooklyn meeting was unfortunate. We’re in a time when efforts to combat climate change are in retreat. A unified front is required to turn the tide. Instead of doubling down on absolutist positions, activists like McKibben who seem convinced that the solution to climate change is all-renewables, end of discussion, should be seeking common ground with others who want climate action but believe that nuclear power and natural gas must also play a role.
NYC Climate March, Sept 17, 2023. Photo: C. Komanoff.
Climate change activists need to build a bigger tent, rather than call anyone who disagrees with their positions a climate change denier. It is striking that McKibben stuck to his guns after saying in the same talk that the most important goal for everyone right now is to help climate change realists win more House and Senate seats in this year’s midterms. As some have noted, an absolutist position on natural gas appears less likely to achieve that win and politicians are following that advice.
Will McKibben evolve? He has demonstrated that he knows how to build a national climate movement centered around issues like divestment. Given the current political situation, he should focus on building an even bigger tent by welcoming all of the 85% who believe that we need to address climate change but do not agree with his ideological positions.
Rich Miller is an energy lawyer who has worked for a variety of stakeholders and now gives walking tours in lower Manhattan on the history of electricity.
Carbon Footprint
Rebranding ‘Balcony Solar’ as ‘Guerrilla Solar’ won’t lift its climate value.
Image generated with Claude. Why have we juxtaposed a bicycle with balcony solar? Read on.
First it was Plug-In Solar. Then it was Balcony Solar. Now it’s Guerrilla Solar, at least according to Inside Climate News, which yesterday proclaimed that The ‘Guerrilla Solar’ Era Has Arrived.
“It,” of course, is Modular solar panels. They’re the hot new photovoltaic solution: cheap enough to buy at Home Depot, easy to hang or prop to catch maximum rays, and small enough to fit on a balcony (if you’ve got one) and plug into your “home grid.” But, alas, too meager a generator of electricity to be more than a bit player in decarbonizing most U.S. homes.
How do I know? I’ve done the math.
A standard, lower-end 220-watt balcony solar array will produce 337 kilowatt-hours a year, or 28 kWh a month averaged over the course of a year. That’s for a 220W unit measuring 3.5 feet by 3.5 feet. (220W x 1/1000 x 17.5% x 8760 hours per year = 337 kWh. Calculation assumes a 17.5% full-year capacity factor, which is arguably generous for New York, where I live. )
Our balcony solar mashup. Top: an install in Germany. Bottom: Home Depot advert.
A typical U.S. home consumes 10,500 kWh a year, or 28 to 29 kWh per day, says Solartech, drawing on U.S. Energy Information Administration data. That puts a home’s daily power needs on par with a balcony solar unit’s monthly output. In effect, once each month the balcony array gifts a homeowner or renter a bit more than day’s full complement of electricity. And earth’s atmosphere gets the same respite: a 3 percent reduction in carbon emissions caused by the home’s electricity usage.
(The 3 percent figure could also be calculated directly by dividing 337 kWh per year of solar production by 10,500 kWh per year to run the home. For bigger or smaller arrays, just prorate your assumed wattage by my 220W; for 440W, say, double my figures.)
Balcony Solar metrics
Why write about balcony solar if it’s so inconsequential? CTC’s mission includes puncturing would-be climate balloons before they ascend too far. In the same vein, we practice quantification to make clear what does and doesn’t move the climate needle. (More on that further below.)
The best way to depict balcony solar’s climate value is to express it in terms of tangible metrics. We’ve selected two. Both assume the basic, lower-end PV array I assumed at the top: a 3.5 foot-square array whose peak output is 220 watts.
1. It would take 50 million 220W balcony solar units (bsu’s) to restore the climate benefit we destroyed in 2020-2021 when we shut the high-performing Indian Point nuclear power plant 32 miles from Midtown Manhattan.
2. A single person cutting back their driving by a mile a day would provide the same climate benefit over the course of a year as a single 220W bsu.
(Calculations in sidebar. Now you know why we led with images of an urban dweller as cyclist and balcony solar user.)
Yes, it’s dense — as befits a sidebar. The numbers tell a story. Follow the color co-ordination.
Ponder that: It would take fifty million smallish bsu’s to level up to the fossil fuel carbon emissions that Indian Point was keeping at bay by supplying the New York City area year in and year out with abundant carbon-free power. Deploying that many balcony solar units would entail 10 bsu’s for each of the 5 million households in the MTA’s service territory. (The Metropolitan Transportation Authority provides subway, bus and commuter rail transit in the five boroughs and seven suburban counties.) Or, if those same households upgraded to 1100-watt bsu’s, collectively they would still make up only half of the lost Indian Point power.
The second comparison, involving driving, is perhaps trickier to grasp but more interesting, since it relates to people’s behavior. Living differently isn’t part of public discourse, at least not in the USA, and especially when what’s being served up is using less. But “reducing,” as we might call it (remember “Reduce, Reuse, Recycle”? or, “Insulate, then Insolate”?) is just as potent for cutting emissions as switching to renewables — even more so when the reducing means driving less, considering the multitude of benefits that accrue from diminishing cars’ imprints on our communities. Still, staying on topic: driving just one fewer mile per day brings about the same shrinkage in carbon emissions as deploying one 220W solar array.
What Balcony Solar boosters are really saying
To be fair, our friends at Inside Climate News and, yes, The New York Times appear to be trying to modulate their balcony solar enthusiasm.
ICN‘s Dan Gearino, whom we cited up front, said he looked to Germany, the birthplace of balcony solar, to see if the units made sense for U.S. households. His takeaway: “It may make more sense financially to spend the cost of plug-in solar on insulation, air sealing or other basic measures to reduce energy use.” Hooray: insulate before you insolate.
Gearino helpfully interviewed renewables guru (and U.S. emigré) Craig Morris, who currently heads Germany’s plug-in solar trade association, Bundesverband Steckersolar. To Morris, balcony solar’s main advantages are that it provides power without taking up land, and that it affords people a way to “become participants in the transition to clean energy.” Behold, guerrilla solar. That, in turn, bolsters “the political consensus that supports the transition.” But Morris also made clear that widespread adoption of plug-in solar would only meet “about 2 percent of Germany’s electricity demand.”
Morris’s “about 2 percent” feels right for Germany. But not for the U.S., where widespread adoption of virtually any individual carbon alternative seems forever out of reach, and where the energy pie is so much larger — think giant fridges, freezers for beer, steroidal homes bursting with piles of powered toys, not to mention industrial and institutional electricity use that Morris correctly excluded from his figure.
Don’t forget to micro-dose. NYT headline + image for David Wallace-Wells’ guest essay (see text). Image by Rui Pu.
Both Gearino and Morris seem more measured than climate journalist Robinson Meyer, founding editor of Heatmap and frequent contributor to The Times, where he wrote about balcony solar in mid-June.
“New zero-carbon power kits will allow Americans to make their own energy choices,” declares the callout to the print version of Meyer’s NYT guest essay, The Tiny Solar Panel That Could Change America. (The even more expansive print headline invites us to “Forget Roofs. Backyard Solar Is the Next Frontier.”)
Wallace-Wells is of two minds. He calls balcony solar “a small way that apartment- and condo-dwelling Americans can take ownership of their energy choices and cut down their pollution on the margins.” No quarrel there, thanks to his qualifiers “small” and “on the margins.” Earlier, though, he opines that balcony solar units “have the potential to change how Americans understand and consume energy,” But read further and you’ll again see Wallace-Wells cautioning that “Balcony solar will play one small role in [the] drama” of transiting to the new world of clean, abundant energy.
Any such caveats are welcome these days, amid widespread solar hoopla. Still, it doesn’t seem to be in Wallace-Wells’ toolkit — or that of Inside Climate News and other mainstream climate journalists — to tutor their audiences as to the true limits of balcony solar and other panaceas. Just like it wasn’t in their field of vision a decade ago to lay out the true stakes of shutting Indian Point as Riverkeeper was singing its siren song.
What’s Next for NY Balcony Solar
Meantime, as Canary Media reported recently (and helpfully), New Yorkers concerned with climate and affordability are waiting for NY Gov. Kathy Hochul to sign the recently passed SUNNY (Solar Up Now New York) Act legalizing balcony and other plug-in solar. It would be head-spinning (and politically suicidal) if she didn’t, given near-universal support ranging from Con Edison to DSA Assembly Member Emily Gallagher, who told Canary Media, “This is the most popular bill I’ve [ever] worked on.”
My guess is that Hochul is waiting for the right moment, and perhaps the right “package,” that can advance and not undercut her push to launch five large new nuclear power plants around the state — one to be built by the public New York Power Authority, the others to be constructed and operated privately. A little bit of math, a la what we offered here a la Indian Point, might help her out.
The governor also must manage the veritable hot potato of her deferred implementation of the landmark 2019 Community Leadership and Climate Protection Act. She might do well to consider jettisoning the act’s unwieldy cap-and-invest centerpiece in favor of a straight-up carbon tax (with the revenues distributed pro rata to the state’s households) in its place. That, far more than balcony (or guerrilla) solar, could blow open the door to the “innovations and technologies we cannot yet imagine” that Wallace-Wells fantasized about in his Times essay.
Carbon Footprint
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On 11 June 2026, the Science Based Targets initiative (SBTi) published the most substantial revision of its flagship corporate framework since its introduction. The SBTi Corporate Net-Zero Standard Version 2.0 takes effect on 1 February 2027 and reshapes the way companies approach their net-zero targets.
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