South Korean electric vehicle (EV) battery manufacturer LG Energy Solution Ltd (LGES) has signed an agreement to supply battery cells to German automaker Mercedes-Benz AG over a ten-year period, according to local reports citing a regulatory filing by the company.
Under the deal LGES is committed to supplying over 50 GWh of battery cells, enough to power some 630,000 vehicles, to Mercedes-Benz’ North American operations between 2028 and 2038. Financial details were not disclosed, but the deal is estimated to worth billions of US dollars. News of the agreement sent LGES’ share price on the Korean Stock Exchange soaring by 6% to a ten-month high on Tuesday.
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A spokesperson for LGES told local reporters: “The deal provides us with an opportunity to get ahead of our Chinese rivals.”
Under the agreement LGES will supply 4680 cylindrical battery cells for fitment in Mercedes-Benz battery electric vehicles (BEVs) to be produced from 2028 at the automaker’s assembly plant in Queen Creek in the US state of Arizona. Mercedes-Benz is currently building a battery pack assembly line at the complex which is scheduled to be completed in 2027.
LGES recently launched pilot production of its newly developed 4680 battery cells in South Korea. These are much larger and have a higher energy-density than the 2170 cells widely in use today. They are also understood to be safer, with a lower risk of thermal runaway. LGES is expected to supply the cells to Mercedes-Benz from its wholly-owned facility in Queen Creek, Arizona, which is scheduled to be completed in 2026.
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By GlobalData
