LG Energy Solution Ltd., one of the world’s top battery makers, has won an order to supply electric vehicle batteries to German automotive giant Mercedes-Benz in a deal estimated at 15 trillion won ($10.8 billion).
The South Korean battery maker said in a regulatory filing on Wednesday that it had signed two contracts to provide a total of 107 gigawatt-hours (GWh) of batteries to the German automotive group.
Specifically, LG will supply 32 GWh batteries to Mercedes-Benz AG in Europe from Aug. 1, 2028 to the end of 2035, and 75 GWh to the German automaker’s affiliates in the US from July 30, 2029, through the end of 2037.
While LG Energy didn’t disclose the value of the agreements, industry estimates put the contracts’ value at about 15 trillion won, based on prevailing prices for its next-generation cylindrical “46 series” batteries, which measure 46 millimeters in diameter.
The volumes will be enough to power 1.5 million EVs with 70-kilowatt-hour packs, according to industry officials.
In the regulatory filing, LG said the final contract size could be adjusted depending on negotiations with the customer, but declined to comment further.
LG’S SINGLE LARGEST ORDER FOR 46 SERIES CELLS
The contracts represent LG Energy’s single largest order to date for its cylindrical 46 series cells.
Sources said the batteries are expected to be produced at LG’s dedicated cylindrical battery plant under construction in Arizona, which is slated to begin mass production next year.
The latest deal underlines LG Energy’s growing importance as a strategic supplier to Mercedes.
Last October, LG and Mercedes-Benz agreed on a 50.5 GWh supply arrangement for the German automaker’s operations in North America and other regions, also believed to involve the 46-type batteries.
Taken together, LG has now secured more than 150 GWh of battery contracts for the 46 series with Mercedes.
LG OUTBID CHINESE RIVALS SUCH AS CATL, FARASIS
Analysts said the win demonstrated the Korean manufacturer’s technological edge over Chinese rivals such as Contemporary Amperex Technology Co. Ltd. (CATL) and Farasis Energy Co., which had also competed for the contract.
“Beating Chinese competitors to win such a large-scale order shows LG’s clear advantage in the 46 series and confirms the competitiveness of Korean battery technology,” said an industry executive.
Analysts said the agreement also signals the strategic value Mercedes places on diversifying supply chains and securing capacity in both Europe and the US, where demand for premium EVs is expected to rise.
LG is building battery plants in the US and Europe for its clients, including Mercedes, Tesla Inc. and General Motors Co., helping their ambition to build new supply chains for manufacturing EVs and reduce reliance on China.
By In-Soo Nam
isnam@hankyung.com
Jennifer Nicholson-Breen edited this article.
