South Korea's LG Energy Solution (LGES) has signed a $4.3 billion deal to supply Tesla with energy storage system batteries, said a person familiar with the matter, as the U.S. company looks to reduce reliance on Chinese imports due to tariffs.

Tesla has signed a $4.3 billion contract with South Korea’s LG Energy Solution (LGES) to source lithium iron phosphate (LFP) batteries for its energy storage systems, Reuters reported, citing sources.

Reuters has reported that Tesla has been looking to reduce reliance on Chinese suppliers amid the ongoing tariff war and policy headwinds. As a result, Tesla aims to reduce its imports from China. The report also stated that LFP batteries will be supplied from LGES's US factory in Michigan.