LG to supply EV batteries to China's Chery

LG Energy Solution's (LGES) 46-series cylindrical batteries / Courtesy of LGES

LG Energy Solution (LGES) has signed a six-year contract to supply 8 gigawatt-hours of 46-series cylindrical batteries to O&J Automotive Netherlands, a subsidiary of China's Chery Automobile.

This is the first time that a Korean company has successfully secured mass sales of cylindrical batteries to a Chinese carmaker.

The agreement is seen as a testament to the competitiveness of LGES' products, as Chinese automakers have traditionally preferred domestically made batteries. Chery has mainly partnered with CATL, although it owns its own battery brand, Kunpeng, which is developing all-solid-state battery technology.

Notably, Chery selected LGES' ternary batteries, made with nickel, cobalt and manganese, for their higher energy density — opting against the more affordable lithium iron phosphate (LFP) batteries mostly produced by Chinese firms.

"Irreplaceable and differentiated customer value, built on unmatched technological prowess, is the only way to overcome the downturn in the electric vehicle (EV) market and seize the upcoming super-cycle," LGES CEO Kim Dong-myung said.
"Our recent contract with Chery is meaningful, and we will use this as a stepping stone to win more orders for our 46-series batteries in global markets and secure a dominant position."

LGES plans to begin battery shipments to Chery early next year.

Although the companies did not disclose the value of the deal, it is estimated at more than 1 trillion won ($732 million). The battery volume is sufficient to power approximately 120,000 EVs.

According to LGES, the two firms have also agreed to continue discussions on additional projects to expand the use of LGES batteries in other Chery EVs.

The partnership comes amid a call from China's Global Times for deeper cooperation between Korea and China in the automotive sector, in response to U.S. tariffs on auto imports and renewed optimism over economic ties between the two Asian countries following President Lee Jae-myung's election win.

Shortly after Lee's victory became clear on the night of June 3, the Chinese newspaper published a column stating, "In the face of escalating U.S. tariff pressures and intensifying global auto market competition, Asian automakers are looking to the broader international market for new growth opportunities. In this context, the practical need for and strategic value of cooperation among regional players have actually expanded rather than diminished."