LG Energy Solution Ltd (LGES) has signed a KRW 5.9 trillion (US$ 4.3 billion) contract to supply lithium-ion phosphate (LFP) batteries to an overseas vehicle manufacturer, according to local reports. The South Korean electric vehicle (EV) battery manufacturer announced the news in a recent regulatory filing.
The filing states that LGES has signed an agreement to supply LFP batteries to an unnamed overseas vehicle manufacturer over a three-year period, starting in August 2027, subject to change depending on the outcome of further discussions with the client.
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This is a major supply agreement for LGES, particularly as it involves supplying its recently introduced LFP batteries, which have lower manufacturing costs and improved safety, albeit with lower energy density and shorter driving ranges, compared with its nickel cobalt manganese (NCM) batteries that are more widely used today.
Market analysts have speculated that the client is Tesla, after the US battery electric vehicle (BEV) manufacturer recently stated that it was seeking a new source of LFP batteries outside China, following the US import tariff hikes earlier this year.
LGES operates three standalone EV battery cell manufacturing plants in the US, including two in Michigan and one in Arizona. It has a further two battery manufacturing plants under its Ultium Cells joint venture with General Motors and battery manufacturing joint ventures with Honda and Hyundai – in the US states of Ohio and Georgia. respectively. It also has a plant in Michigan that makes LFP batteries for energy storage systems (ESS).
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