Lion Energy announced a strategic partnership with American Battery Factory (ABF), a lithium iron phosphate battery cell manufacturer developing domestic manufacturing facilities. The partnership includes an equity position for Lion Energy in ABF.

ABF secured offtake agreements for more than 4.5 GWh of initial production capacity from its planned gigafactory in Tucson, Arizona. The facility will produce prismatic LFP battery cells for energy storage applications.

The partnership gains significance following Aqua Metals' (NASDAQ: AQMS) announced acquisition of Lion Energy. The transaction aims to create a vertically integrated battery ecosystem covering manufacturing, deployment, energy management and recycling.

"The strong customer demand we are experiencing and our recently announced offtake agreements reinforce the importance of building a fully domestic battery supply chain," said Tyler Hortin, CEO of Lion Energy.

Lion Energy is expanding its U.S. battery assembly capabilities with new production lines scheduled to begin operations in June. The company stated these systems will be FEOC and Domestic Content compliant.

Steve Cotton, CEO of Aqua Metals, said the partnership positions the company to participate in U.S. battery manufacturing growth while extending across the battery lifecycle from production to recycling.

Lion Energy, based in American Fork, Utah, designs energy storage systems for residential, commercial and industrial applications. ABF is developing what it describes as one of the first networks of domestic giga-scale battery cell manufacturing facilities in the United States.