LG Energy Solution Secures $15 Trillion Battery Deal with Mercedes-Benz
Seoul, South Korea – September 3, 2025 – LG Energy Solution announced today a landmark agreement to supply Mercedes-Benz Group affiliates with 107 Gigawatt-hours (GWh) of advanced batteries. This massive contract underscores the growing demand for electric vehicle batteries and reinforces LG Energy Solution’s position as a leading global supplier.
Deal Breakdown and Timeline
The agreement encompasses two separate contracts.A 32GWh supply agreement is directly with Mercedes-Benz AG, while a larger 75GWh commitment extends to other affiliates within the Mercedes-Benz Group.Deliveries under the Mercedes-Benz AG contract are slated to begin August 1, 2028, and continue through December 31, 2035. The broader affiliate contract runs from July 30, 2029, to December 31, 2037.
The Next-Generation 46 Series Battery
Industry analysts estimate the core of this agreement centers around the next-generation 46 series cylindrical battery – a larger format cell with dimensions of 46mm in diameter and 80-120mm in height. This battery format is gaining prominence due to its potential for increased energy density and improved thermal management. Industry sources suggest the contract value could reach approximately 15 trillion won,sufficient to power around 1.5 million electric vehicles, assuming an average battery capacity of 70 kilowatt-hours (kWh).
Strategic Implications and market Competition
This deal builds upon a previous 150GWh supply agreement signed in October of last year.LG Energy Solution intends to fulfill a portion of this contract, specifically 36GWh, from its under-construction cylindrical battery plant in Arizona. This strategic move demonstrates a commitment to localized production and reducing supply chain vulnerabilities. The accomplished negotiation of this contract highlights LG Energy Solution’s competitive edge against rivals like CATL and Parasis, particularly within the European automotive market.
Did you Know? Global electric vehicle battery demand is projected to reach 2,800 GWh by 2030, creating a multi-billion dollar market for battery manufacturers. Source: International Energy Agency
| Contract feature | Mercedes-Benz AG | Affiliates |
|---|---|---|
| Battery Volume | 32 GWh | 75 GWh |
| Contract Start Date | August 1, 2028 | July 30, 2029 |
| Contract End Date | December 31, 2035 | December 31, 2037 |
| Estimated Value | Part of $15 Trillion Won | Part of $15 Trillion Won |
“LG Energy Solution has proven the advanced technology of the Korean battery industry by successfully winning orders,” noted one industry official. The agreement solidifies not only the company’s technological prowess, but also its ability to deliver secure and scalable battery solutions to meet the escalating demands of the automotive industry.
The Evolution of Battery Technology
The automotive industry is undergoing a rapid transition towards electric vehicles, driven by environmental concerns and advancements in battery technology.Early electric vehicles relied heavily on Nickel-Metal Hydride and Lithium-ion batteries.However, newer technologies like solid-state batteries and advanced cylindrical formats, like the 46 series, promise higher energy density, faster charging times, and improved safety.The competitive landscape in the battery sector is fierce, with companies constantly innovating to gain an edge. Factors such as raw material sourcing, manufacturing efficiency, and recycling capabilities are also playing increasingly critically importent roles. source: Bloomberg
Frequently Asked Questions about LG Energy Solution and EV Batteries
What impact will this deal have on the future of EV battery production? Share your thoughts in the comments below!
