LG Energy Solution has secured a roughly 2 trillion won (USD 1.4 billion) contract with Mercedes-Benz Group AG to supply electric vehicle (EV) batteries, reinforcing the long-standing collaboration between the South Korean battery producer and the German luxury automaker. The deal, valued at 2.06 trillion won, marks the fourth major supply agreement between the two companies in just two years, according to Pulse, the English-language service of Maeil Business News Korea.
The report, released Monday, states that the battery deliveries will take place from March 1, 2028, through June 30, 2035, and will cover shipments to both North America and Europe. LG Energy Solution noted that the contract’s value and timeline may be adjusted as discussions with Mercedes-Benz progress.
This latest deal represents about eight percent of LG Energy Solution’s 2023 revenue of 25.62 trillion won. Industry analysts cited in the report expect the batteries supplied under the agreement to target mid-range and entry-level EVs, reflecting Mercedes-Benz’s strategy to broaden its electric lineup and appeal to a wider market.
Mercedes-Benz, which unveiled its updated electrification roadmap in September, plans to roll out more than 40 new EV models worldwide by 2027. The expansion is driving stronger demand for battery solutions across both high-end and more affordable segments.
Over the past two years, the companies’ contracts have primarily centered on LG’s cylindrical 46-series batteries, known for their use in high-performance vehicles. The new agreement is interpreted as a shift toward supplying batteries for more cost-competitive models, aligning with Mercedes-Benz’s wider EV ambitions.
LG Energy Solution’s current portfolio includes a diverse range of products—from the premium 46-series cylindrical batteries to high-voltage mid-nickel pouch cells and lithium iron phosphate batteries designed for mass-market vehicles. Its variety of offerings, along with localized production capabilities, has bolstered the company’s global competitiveness.
Industry observers say the latest contract could help South Korean battery makers reclaim market share in Europe and other strategic regions where Chinese producers have made gains with lower-cost alternatives. Strengthening its partnership with Mercedes-Benz is also seen as a key move for LG Energy Solution as it works to expand its global presence.
The report added that prior to the agreement, Mercedes-Benz Chairman Ola Källenius met with LG Group affiliates in Seoul in mid-November to discuss future mobility cooperation. He noted that the two companies share a commitment to innovation, quality, and sustainability, and emphasized their joint efforts to set new benchmarks in the global automotive sector.
