LG Energy Solution has signed a deal worth around 2 trillion won ($1.4 billion) with Mercedes-Benz Group AG to supply electric vehicle (EV) batteries, deepening the partnership between the South Korean battery maker and the German automaker. The agreement, valued at 2.06 trillion won, marks the fourth major contract between the two companies in just two years, as per a report.
The report stated that the battery supply agreement is set to run from March 1, 2028, through June 30, 2035, covering deliveries to North America and Europe. The company stated that the contract’s value and duration may be adjusted based on further discussions with the customer. The new agreement accounts for approximately 8% of LG Energy Solution’s total revenue of 25.62 trillion won last year. According to the report, industry analysts expect that the latest supply will primarily target batteries for mid- to entry-level EV models, reflecting Mercedes-Benz’s strategy to diversify its product line-up and appeal to a broader range of customers.
Mercedes-Benz, which unveiled its electrification roadmap in September, aims to introduce over 40 new models worldwide by 2027. This ambitious expansion is driving heightened demand for battery solutions across both premium and entry-level segments. Over the past two years, the companies’ previous deals primarily focused on LG’s cylindrical 46-series batteries, renowned for powering high-performance vehicles. The new contract, however, is seen as a strategic shift toward more affordable models, in line with the automaker’s broader electric vehicle ambitions.
LG Energy Solution offers a comprehensive range of batteries, from the high-performance 46-series cylindrical cells for premium vehicles to high-voltage, mid-nickel pouch batteries and lithium iron phosphate units designed for standard and budget-friendly models. Its diverse product portfolio, combined with strategically located production facilities, has significantly enhanced the company’s competitiveness in global markets.
