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LG Energy and Mercedes-Benz Seal $1.4 Billion Deal: A New EV Battery Era

LG Energy Solution has locked in a massive new battery deal with Mercedes-Benz. The agreement is worth about $1.4 billion and is set to begin in 2028. This contract signals a shift, as it's expected to focus on batteries for more affordable electric models. It's a strategic move for both companies to strengthen their position in the competitive global EV market.

Key Points: LG Energy Solution $1.4B EV Battery Deal with Mercedes-Benz

  • The multi-year supply contract runs from 2028 to 2035 for North America and Europe
  • The deal represents about 8% of LG Energy Solution's total revenue from last year
  • Batteries are likely for mid- to entry-tier EVs, diversifying Mercedes' lineup
  • The partnership helps Korean firms compete against lower-cost Chinese manufacturers in Europe
2 min read

LG Energy Solution seals USD 1.4 billion EV battery deal with Mercedes-Benz

LG Energy Solution signs a $1.4 billion deal to supply Mercedes-Benz with EV batteries from 2028, targeting mid-tier models and expanding their strategic partnership.

"Mercedes-Benz and LG share a vision rooted in innovation, quality and sustainability. - Ola Kallenius, Mercedes-Benz Chairman"

Seoul, December 8

LG Energy Solution has signed a deal worth around 2 trillion won (USD 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 by Pulse, the English service of Maeil Business News Korea.

According to the report on Monday, the battery supply deal will run from March 1, 2028, to June 30, 2035, covering deliveries to North America and Europe. The company said the contract value and duration could change depending on further discussions with the customer.

The new agreement represents about eight per cent of LG Energy Solution's total revenue of 25.62 trillion won last year. The report noted that industry analysts believe this latest supply will likely focus on batteries for mid- to entry-tier EV models, signaling a diversification of Mercedes-Benz's product lineup to reach a broader customer base.

Mercedes-Benz, which announced its electrification roadmap in September, plans to launch more than 40 new models globally by 2027. This push has increased demand for battery solutions across both premium and entry-level vehicles.

Over the past two years, the companies' previous deals largely involved LG's cylindrical 46-series batteries, known for powering high-performance vehicles. The new contract is viewed as a move toward more affordable models, aligning with the automaker's broader EV ambitions.

LG Energy Solution currently provides a wide range of batteries, from the cylindrical 46-series for top-end vehicles to high-voltage mid-nickel pouch batteries and lithium iron phosphate units for standard and lower-priced models. The company's diverse product portfolio and local production bases have strengthened its competitiveness in global markets.

Industry watchers said the latest agreement could help South Korean battery producers regain ground in Europe and other key regions where Chinese manufacturers have been expanding with lower-cost products. The deeper collaboration with Mercedes-Benz is also seen as a strategic step for LG Energy Solution to enhance its global footprint.

"Ahead of the latest agreement, Mercedes-Benz Chairman Ola Kallenius met LG Group affiliates in Seoul in mid-November to discuss future mobility cooperation. Kallenius said at the time that Mercedes-Benz and LG share a vision rooted in innovation, quality and sustainability, and that the companies are working together to set new standards in the global auto industry," the report said.

- ANI

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Reader Comments

P
Priya S
Good to see Korean companies competing strongly with Chinese battery makers. We need this kind of healthy competition in the global market. I hope Indian companies like Tata and Mahindra are watching and forming similar long-term partnerships for our own EV push.
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Vikram M
The duration is from 2028 to 2035... that's a very long-term commitment. Shows they are betting big on EVs. By 2035, I hope most cars on Indian roads are electric. Our government's FAME policy needs to support local battery manufacturing aggressively.
S
Sarah B
While this deal is impressive, I hope the focus on "affordable models" is genuine and not just a marketing term. True affordability means making EVs accessible in developing markets like India, not just cheaper versions for Europe and North America.
R
Rohit P
LG's diverse portfolio is key here. They have batteries for luxury and budget cars. This is the strategy Indian battery startups should learn from. Don't put all eggs in one basket. Jio-bp and other Indian ventures, please take note! 🔋
K
Karthik V
The partnership on innovation and sustainability is promising. But the real test is the total cost of ownership and battery life in our Indian conditions - heat, dust, and unpredictable charging infrastructure. Hope these global deals eventually benefit the common man here.

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