The United States government has officially confirmed a $4.3 billion battery supply deal between electric vehicle manufacturer Tesla and South Korean battery maker LG Energy Solution.

The confirmation comes as the Biden administration continues to promote domestic electric vehicle production and battery manufacturing as part of broader climate and industrial policy initiatives. The deal represents one of the larger battery supply agreements in the rapidly expanding EV market.

LG Energy Solution, a subsidiary of LG Chem, is one of the world's leading battery manufacturers and has been expanding its presence in the North American market. The company has been working to establish manufacturing facilities closer to major automotive customers to reduce supply chain costs and dependencies.

Tesla has been diversifying its battery supply chain beyond its primary partnership with Panasonic, seeking to secure adequate battery supplies to meet growing demand for its electric vehicles. The company has been rapidly scaling production at its facilities in Texas, California, and internationally.

The deal is expected to support Tesla's production goals while helping LG Energy Solution strengthen its position in the competitive North American battery market. Financial terms and delivery schedules for the agreement were not immediately disclosed by either company or government officials.