LG Energy Solution Ltd. has signed a $1.4 billion battery supply deal with Mercedes-Benz, marking the fourth supply agreement with the German carmaker in just two years.
Under the contract, LG Energy will deliver batteries over a period of seven years from March 2028 to June 2035, according to its regulatory filing on Friday. It did not disclose the specific volume or battery type.
Industry watchesr expect the deal to involve 15-20 gigawatt hours (GWh) of lithium iron phosphate (LFP) batteries, typically used in mid- to lower-priced electric vehicles.
The deal followed a 50.5-GWh supply contract with Mercedes-Benz signed in October last year, followed by two additional agreements announced in September totaling 75 GWh and 32 GWh. The September contracts were worth about $11 billion.
Including the latest $1.4 billion deal, LG Energy is now slated to supply Mercedes-Benz with about $16 billion worth of batteries in total.
Mercedes-Benz dealership in Korea
LG Energy has been preparing to supply higher-end, high-enerdy-density batteries, including 46-series cylindrical cells.
The new contract comes as the German automotive group is reportedly shifting away from a luxury-only strategy and expands into mid-priced and mass-market EV models.
Analysts say the range of batteries LG Energy supplies to the automaker is becoming increasingly diversified. It plans to produce the LFP batteries at its plants in the US and Europe.
“Our partnership with Mercedes-Benz is strengthening across our vehicle components businesses,” said an LG Group official. “Cooperation will continue to expand across the broader electric vehicle ecosystem, including batteries.”
