Lion Energy is moving to lock in American-made batteries, taking a strategic stake in American Battery Factory and securing a pipeline of U.S.-produced prismatic lithium-iron-phosphate (LFP) cells for its energy-storage systems. The deal ties Lion to ABF's planned Tucson gigafactory, which the companies say already has more than 4.5 GWh of initial offtake lined up, and lands just as Lion's new U.S. assembly lines are scheduled to start up in June, according to Business Wire.
In its announcement, Lion said the alliance will allow it to fold domestically produced LFP cells into its LionESS hardware and software stack as supply comes online. The company added that its assembled systems are intended to meet Foreign Entity of Concern (FEOC) and domestic-content rules that steer incentives toward U.S.-centric supply chains, Business Wire reports. CEO Tyler Hortin said in the release that "our strategic partnership and equity position in ABF reflect our confidence in their vision," signaling Lion is not treating this as a casual sourcing arrangement.
What The Tucson Gigafactory Means
American Battery Factory has picked a 267-acre Aerospace Research Campus site in Pima County for its flagship plant and held a public groundbreaking there in October 2023, according to PR Newswire. Since then, the company has announced offtake agreements covering more than 4.5 GWh of the factory's initial output, a milestone Batteries News notes is key to closing plant financing.
The Tucson build is pitched as a large-scale LFP hub, and having early customers effectively call dibs on a big chunk of production helps ABF show lenders this is not a speculative science project. For Lion, being part of that early offtake mix could mean a steadier lane for cell supply once the factory is up and running.
Regulatory Push And Production Timing
Tightening FEOC and domestic-content rules are driving a wave of onshoring deals, and pv magazine USA reports that those policy levers are shaping how partners like Lion and ABF pair up. The outlet also notes that Lion plans to bring new U.S. assembly lines online in June, positioning the company to accept ABF cells once they are available and to deliver systems that aim to qualify under evolving domestic-content tests.
In practice, that means the calendar matters almost as much as the technology. The closer Lion can align its assembly start with ABF's eventual cell output, the better shot it has at delivering storage products that fit snugly inside the latest federal incentive rules.
Aqua Metals And Vertical Integration
Layered on top of the supply deal is a potential ownership shakeup. Aqua Metals disclosed in a Form 8-K that it entered a term sheet in February 2026 to acquire Lion Energy, a step the companies say could create a more vertically integrated U.S. battery lifecycle platform, according to the SEC. Company executives told Business Wire the combined footprint would span domestic cell production, system integration and end-of-life recycling.
If that deal closes as outlined, Lion would not just be locking in cells from Tucson, it would also be plugged into a broader loop that runs from battery materials to grid-ready systems and then back again at recycling time.
Jobs, Dollars And Delivery
ABF's original project materials put the Tucson plant at roughly 1.2 billion dollars in capital investment and estimated more than 1,000 jobs when fully built out, according to PR Newswire. Industry coverage adds that the offtake agreements cover most of the factory's initial five-year output and should enable ABF to finalize plant financing and equipment orders ahead of a late-2027 production start, Batteries News reports.
Near term, the checklist is straightforward: can ABF turn those contracts into real LFP cells on a schedule that lines up with Lion's June assembly ramp, and will financing and automation vendors hit the dates needed for a 2027 cell launch. pv magazine USA points out that lingering questions about what truly qualifies as "Assembled in USA," and about actual delivery timing, will heavily influence whether the partnership translates into top-tier tax credits and rapid deployment on the ground.
