LG secures energy supply deal worth 107 gigawatt-hours with Mercedes-Benz
LG Energy Solution has announced new battery supply agreements with Mercedes-Benz, covering both the European market and the USA. These agreements supplement an earlier agreement made in October 2024, which was for the North American market.
The first agreement, for the European market, covers a battery supply of 32 gigawatt-hours from August 2028 to the end of 2035. This means that over the next seven years, LG Energy Solution will provide Mercedes-Benz with enough battery capacity to power approximately 3.2 million electric vehicles (EVs), assuming each vehicle requires a 100 kWh battery.
In addition to this, a second agreement covers a battery supply of 75 gigawatt-hours to the USA, from July 2029 to the end of 2037. This means that from 2029 to 2037, LG Energy Solution will provide enough battery capacity to power around 7.5 million EVs in the USA.
The total capacity of these new agreements, along with the earlier agreement, amounts to 157.5 gigawatt-hours. The combined order volume for both regions is approximately 9.3 billion euros.
The battery cells involved in these new agreements are expected to be cylindrical cells in the 46 format. It is speculated that these cells may be produced at the under-construction LG Energy Solution plant in Arizona, USA.
However, the exact location of the battery supply for the USA is not specified in these agreements. The financial details of these new agreements are also not provided at this time.
It's worth noting that the earlier agreement, made in October 2024, was with a subsidiary of Mercedes-Benz, among others, for the North American market. The exact financial details of this earlier agreement are not provided in the current paragraph.
The LG Energy Solution factory under construction in Arizona, expected to supply these 46-format cylindrical cells for Mercedes-Benz contracts, is called the "LG Energy Solution" factory. It is being built in partnership with Hyundai.
These new agreements mark a significant step forward in the electrification of the automotive industry and underscore LG Energy Solution's commitment to supporting the transition to sustainable mobility solutions.
