South Korean battery manufacturer LG Energy Solution (LGES) revealed in a regulatory filing that it has signed a new deal to supply KRW 2 trillion (US$ 1.36 billion) worth of electric vehicle (EV) battery cells to Mercedes-Benz, further strengthening the partnership between the two companies.
This is the fourth major supply agreement between the two companies, following a KRW 6 trillion deal signed in October of last year for 50 GWh of battery cells, and two separate deals signed in September worth a combined KRW 15 trillion for 107 GWh of battery cells. These deals are for the supply of high-density 46-mm cylindrical battery cells to the German automaker’s assembly plants in Europe and the US over a ten-year period starting in 2028.
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This latest deal is understood to involve the supply of EV battery cells for mid-range EVs produced by Mercedes-Benz in Europe and US over a period of seven years, from March 2028 to June 2035. LGES pointed out that the deal remains subject to change upon further negotiations with the automaker.
Mercedes-Benz recently announced it is stepping up the roll-out of new products over the next two years, with 40 new and refreshed models scheduled to be launched by 2027, including internal combustion engine (ICE), hybrid and battery-powered models.
LGES has benefited in the last few years from increased restrictions on the use of Chinese content in EVs sold in the US, mainly at the expense of Chinese battery makers CATL and Farasis Energy in the case of Mercedes-Benz. This has allowed LGES to strengthen its global market position in the larger-volume, mid-range EV battery segments, which have long been dominated by Chinese manufacturers. The European Union is also scheduled to tighten its battery life-cycle emission standards from next year, from raw materials mining, to manufacturing, logistics, usage and disposal, which is also expected to disadvantage Chinese suppliers.
