LGES and Mercedes sign another major battery deal

Several Korean media outlets report, citing a regulatory filing from LG Energy Solution (LGES), that the new contract provides for the supply of LG batteries to Mercedes-Benz in North America and Europe over a period of seven years, from 1 March 2028 to 30 June 2035. However, LGES stated in its filing that the contract value and duration may still change, and no further details are currently available. For now, it remains unclear whether only battery cells or complete battery packs will be supplied.

The contract value of two trillion won, as reported by Pulse, the English-language edition of Maeil Business News Korea, represents around eight per cent of LGES’s revenue in the previous year. At that time, the company generated 25.62 trillion won. While unconfirmed, various media reports suggest that the battery supply now under negotiation is intended for Mercedes’ mid-range and entry-level electric vehicles. “Considering that the three major supply deals between the companies over the past two years were believed to involve cylindrical 46-series batteries for high-performance, high-end models, analysts view this new deal as targeted toward mid-priced vehicles,” the newspaper report states. No further details—such as form factor or cell chemistries—have been disclosed.

One thing is clear: the ties between both parties are strengthening. As early as October 2024, LG Energy Solution signed a contract with Mercedes-Benz for 50.5 GWh of batteries. Details remained scarce at the time, and it was unclear whether only cells or ready-to-install battery packs would be delivered. Korean media, however, reported that the contract was based on 46-series cylindrical cells, which are to be supplied from 2028 onwards. This September, another major deal covering 107 GWh was announced (75 GWh for delivery to the USA between mid-2029 and the end of 2037; 32 GWh for Europe between mid-2028 and the end of 2035). Here, too, media reports identified the 46-series cylindrical cells as the subject of the contract. If all details are confirmed, the total volume of the two contracts amounts to nearly 160 GWh of large cylindrical cells. Since the newly announced deal spans similar timeframes as the two aforementioned contracts, it seems logical that Mercedes has not ordered 46-series cylindrical cells again—though this is not yet certain.

Incidentally, according to further information from Korean portals, the September contract was only awarded after intense competition with Chinese battery manufacturers such as CATL and Farasis. Both companies, along with LGES, are already regular battery suppliers to the Stuttgart-based automaker. While Mercedes is also involved in a battery manufacturing joint venture, namely ACC, its demand far exceeds the planned output of ACC. This is particularly true as plans for two of the three ACC plants are currently on hold, and the proposed factory in Italy is reportedly on the verge of being scrapped.

Mercedes CEO Ola Källenius is therefore seeking stability in supplier relations: in mid-November, Källenius met with representatives of the LG Group in Seoul to discuss future collaboration in the mobility sector. The Mercedes top executive subsequently stated that Mercedes-Benz and LG share a common vision based on innovation, quality, and sustainability—and that they are working together to set new standards in the global automotive industry.

pulse.mk.co.kr, biz.chosun.com, businesskorea.co.kr

This article was first published by Cora Werwitzke for electrive’s German edition.