LG Energy Solution has signed an electric vehicle battery supply contract with Mercedes-Benz AG worth over KRW 2 trillion. Over the past two years, LG Energy Solution has secured approximately KRW 25 trillion in battery supply contracts from Mercedes-Benz alone. Amid the rise of Chinese battery companies leveraging price competitiveness in the global electric vehicle market, LG Energy Solution has strengthened its presence in the electric vehicle battery market by consecutively winning large-scale orders from Mercedes-Benz.

● Supplying Batteries for Mid-Range Mercedes Vehicles

According to the electronic disclosure by the Financial Supervisory Service on the 8th, LG Energy Solution has signed an electric vehicle battery supply contract with Mercedes-Benz valued at KRW 2.0601 trillion. This contract accounts for 8% of LG Energy Solution's last year's revenue (KRW 25.6195 trillion). The supply contract spans approximately seven years, from March 2028 to June 2035, and will cover deliveries to Europe and North America.

The initial collaboration between LG Energy Solution and Mercedes-Benz began in October last year. At that time, LG Energy Solution secured a contract to supply a total of 50.5 GWh of electric vehicle batteries in North America and other regions, with the contract amount estimated at KRW 7 trillion to KRW 8 trillion. In September this year, contracts were signed to supply 75 GWh and 32 GWh of electric vehicle batteries in the United States and Europe, respectively, amounting to an estimated KRW 15 trillion in total.

Regarding this contract, LG Energy Solution stated, “We cannot confirm additional details beyond the disclosed content due to customer agreements.” However, industry analysis suggests that the products supplied under this contract are likely to be batteries for mid-range electric vehicle models. LG Energy Solution supplies high-voltage mid-nickel (Mid-Ni) pouch-type batteries and lithium iron phosphate (LFP) batteries for standard and mid-range vehicle models.

In September, Mercedes-Benz announced a large-scale electrification strategy, stating its plan to launch over 40 new models by 2027. The company emphasized a significant expansion of its small and medium-sized electric vehicle lineup. Through the three large-scale supply contracts previously signed, Mercedes-Benz has already secured the ‘46 series’ battery supply for high-end electric vehicles. The 46 series is a next-generation cylindrical battery with a diameter of 46mm and a height of 80-120mm, primarily used in premium electric vehicles requiring high output and performance.

● Strengthening the ‘LG-Mercedes Alliance’ Amid Chinese Advances

The battery industry views this supply contract as a hopeful turning point to reclaim market share in the global electric vehicle market, which has been dominated by Chinese companies leveraging price competitiveness. According to SNE Research's 'Global Electric Vehicle Battery Usage' report released on the 2nd, the global battery market shares for the top two positions were held by China's CATL and BYD, with 38.1% and 16.9% respectively from January to October this year. Both companies increased their market share compared to last year. In contrast, the market shares of Korean battery companies such as LG Energy Solution (3rd place, 11.1% → 9.3%), SK On (joint 4th place → 6th place, 4.6% → 4%), and Samsung SDI (8th place, 3.8% → 2.7%) have declined.

In this context, securing stable battery supply contracts with global automakers has become a critical task for domestic battery companies. Last month, Ola Källenius, Chairman of Mercedes-Benz, visited Korea and met with the leadership of LG Group, emphasizing that “LG and Mercedes-Benz share a vision based on innovation, quality, and sustainability.”

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