LG Energy Solution has struck a contract to supply EV batteries worth an estimated some 15 trillion won to Mercedes-Benz. The deal involves an over 100GWh huge capacity.
The latest winning order came some one year after the company landed a 7 trillion won deal from the German automaker in October 2024.
LG Energy Solution signed two contracts to supply EV batteries to Mercedes-Benz, the company said in an electronic notice issued on Sept. 3.
The deals call for supplying a combined 75GWh capacity to a subsidiary of Mercedes-Benz in the United States from July 2029 to December 2037 and a combined 32GWh capacity to Mercedes-Benz AG in Europe from August 2028 to December 2035.
LG Energy Solution would not disclose details, except the officially notified ones, but business sources said the supply contracts were expected to be involved in its next-generation, 46-series cylindrical EV battery.
The 48-series is a cylindrical EV battery, measuring 46mm in diameter and 80-120mm in height.
The next-generation battery boasts of energy volume and power output five times mor than the conventional “2017” battery, measuring 21mm in diameter and 70mmin height, as well as excellent space efficiency. It is evaluated to have higher price competitiveness on the back of shorter process time and lower costs.
The latest contract with Mercedes-Benz is the largest 46-series deal among those which have been announced so far. The combined 100GWh is enough to produce 1.5 million EV units.
An image of the next-generation, 46-series cylindrical EV battery, produced by LG Energy Solution.
Given the battery price, standing at between $90 and $110, the value of the deal is estimated at some 15 trillion won, business sources said.
The contract on a combined 50.5GWh capacity, announced last year, involved a 46-sereis EV.
LG Energy Solution landed the latest deal, beating competition from Chinese EV battery makers. Mercedes-Benz has so far expanded cooperation with Chinese battery makers, such as CATL and Farasis. LG Energy Solution was involved in a fierce competition with Chinese companies until the final negotiation rounds, but the former snatched the honor on the back of the technology power of the 46-series battery.
LG Energy Solution Posts 5.6 Trillion won in Consolidated Revenue and 492.2 Billion in Operating Profit in Q2 2025
LG Energy Solution (KRX: 373220) on July 25 announced its second-quarter earnings for 2025, posting a quarterly operating profit even without North American production incentive, mainly through product mix improvements and continued efforts to improve cost efficiency.
The company posted consolidated revenue of 5.6 trillion won, an 11.2 percent decrease quarter-on-quarter.
The operating profit was 492.2 billion won, marking a 31.4 percent increase quarter-on-quarter, with operating profit margin of 8.8 percent. The operating profit includes North American production incentive, which is estimated at 490.8 billion won.
“In the second quarter, we secured stable EV battery sales and also started production at our new ESS battery facility in North America,” said Chang Sil Lee, CFO of LG Energy Solution. “However, constrained customer purchase sentiment, coupled with the reflection of metal price decline to our average selling price (ASP) affected our quarterly revenue.”
Lee added, “At the same time, we saw improvements in our product mix thanks to increased production in North America, along with enhanced cost efficiency and favorable material cost ratio, all of which contributed to the quarterly operating profit even when excluding North American production incentive.”
At the earnings conference, LG Energy Solution outlined its market outlook and strategic action plans for the second-half of the year.
Following tariff and policy changes in the U.S., Europe, the U.K. and the associated cost pressure on major automakers, the company anticipates a short-term slowdown in EV demand.
At the same time, it expects advancements in autonomous driving technology to drive mid-to long-term growth momentum.
The company projects increased demand in the energy storage system (ESS) market, capitalizing on new business opportunities from both existing and new renewable energy plants and AI data centers.
It also predicts that the IRA Investment Tax Credit (ITC) will present more opportunities by incentivizing a shift in the supply chain toward non-Chinese battery suppliers.
In terms of market competition, the company expects recent policy changes to strengthen barriers against Prohibited Foreign Entities (PFE) entering the U.S. battery market, thereby reinforcing the advantage for battery companies that have already secured local production capabilities and stable operational competencies.
Taking these transitions into account, LG Energy Solution now aims to build on its second-quarter accomplishments and maintain its growth momentum.
In the second quarter, the company focused on establishing local ESS battery production, which recently came to fruition with the start of production at its first North American ESS battery manufacturing hub in Michigan.
By proactively adjusting its capacity expansion plans, the company now aims to expand its annual production capacity for ESS batteries to 17GWh by the end of this year.
In terms of operation, LG Energy Solution will first maximize the utilization of its existing production capacity by focusing on ESS batteries and new form factors and chemistries.
Also, it will reduce fixed costs by adjusting and scaling down investment plans while securing competitiveness in the supply chain and sourcing.
In terms of its business portfolio, the company will continue to expand its ESS business in North America and secure over 30GWh of annual production capacity in the region by the end of 2026.
In Europe, it will start mass producing mid- to low-end batteries such as high-voltage mid-nickel and LFP batteries at its Poland facility in the second-half of the year.
In terms of technological advancement, LG Energy Solution plans to enhance its mid- to low-end product portfolio with EV/ESS LFP batteries and EV LMR (lithium manganese-rich) batteries, while also advancing product competitiveness—including energy density—through innovative technologies.
The company will also launch EV batteries with the charging speed of less than 10 minutes by 2028. For dry electrodes, a key driver for cost innovation, the company will evaluate the production feasibility within this year and establish sample production system at its facility in Ochang, Korea.
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