LG Energy Solution Signs Mega Battery Supply Deal with Mercedes-Benz Worth 15 Trillion Won

Production Capacity for 1.5 Million Vehicles in the US and Europe
Two Contracts Totaling 107GWh Signed

LG Energy Solution has signed a mega battery supply contract with Mercedes-Benz of Germany, exceeding 100 gigawatt-hours (GWh) in capacity. In terms of value, this deal amounts to a windfall of approximately 15 trillion won. Through this contract, LG Energy Solution is not only establishing itself as a key supplier for Mercedes-Benz but is also being recognized for asserting its presence in the European market, which has been dominated by Chinese products.

On March 5th, at the LG Energy Solution booth at InterBattery 2025 held at COEX in Gangnam-gu, Seoul, a model of the underside of an electric vehicle equipped with the 46 series battery was exhibited. Photo by Yonhap News

On September 3, LG Energy Solution announced that it has entered into a battery supply agreement with Mercedes-Benz for a total of 107GWh. Specifically, it will supply 75GWh to Mercedes-Benz affiliates in the United States from July 30, 2029, to December 31, 2037, and 32GWh to Mercedes-Benz AG in Europe from August 1, 2028, to December 31, 2035.

In its disclosure, LG Energy Solution stated, "We are announcing the signing of a contract to supply a total of 107GWh of electric vehicle batteries. While the expected contract amount has not been finalized, it is estimated to exceed the threshold for timely disclosure. Contract terms, including supply volume and contract period, may be adjusted through further negotiations with the customer."

Although LG Energy Solution did not reveal detailed information, industry sources believe that the two contracts involve next-generation cylindrical batteries, specifically the 46-series (46mm in diameter). This is the largest 46-series supply contract announced to date, with enough volume to produce approximately 1.5 million electric vehicles, based on 70 kilowatt-hours (kWh) per vehicle.

Given that the current market price for 46-series batteries is between $90 and $110 per kWh (about 120,000 to 150,000 won), the industry estimates that the total contract value will be around 15 trillion won.

This contract is seen as solidifying LG Energy Solution's position as a primary supplier for Mercedes-Benz. In October last year, LG Energy Solution also signed a contract with Mercedes-Benz to supply 50.5GWh of electric vehicle batteries in North America and other regions. As a result, LG Energy Solution has now signed contracts totaling more than 150GWh of 46-series batteries with Mercedes-Benz.

This deal is particularly significant as it demonstrates LG Energy Solution's competitive edge, including its differentiated local production capabilities and advanced 46-series technology. The fact that LG Energy Solution secured this contract after fierce competition with Chinese companies such as CATL and Farasis is attributed to its technological superiority in the 46-series segment. A company representative commented, "Chinese companies have a strong influence in the European market. This order could be a turning point for us to regain market share."

The 46-series battery is known as an innovative product, offering five times the energy density and six times the output compared to the existing 2170 (21mm diameter, 70mm height) battery, resulting in a 20% increase in electric vehicle driving range. LG Energy Solution plans to begin mass production of the 46-series at its plant in Queen Creek, Arizona, starting next year. This facility is capable of producing 36GWh of cylindrical batteries and 17GWh of energy storage system (ESS) batteries annually. It is expected that the contract volume for the United States will be fulfilled at this dedicated cylindrical battery plant in Arizona. In addition, prototype 46-series batteries are currently being produced at the Ochang Energy Plant in Cheongju, North Chungcheong Province, Korea. However, the production site within Europe has not yet been determined.

An industry insider commented, "By signing another large-scale supply contract with Mercedes-Benz following last year, LG Energy Solution has once again demonstrated its technological prowess. As the adoption of the 46-series expands to premium automobiles, further orders are anticipated."

However, an LG Energy Solution representative stated, "We cannot confirm any details beyond what has been disclosed, as this is subject to consultation with the customer."