LG Energy wins $4.26 bil. overseas LFP battery deal

LG Energy Solution's ESS products equipped with LFP batteries / Courtesy of LG Energy Solution

LG Energy Solution (LGES), Korea's leading battery maker, said Wednesday it has signed a 5.9 trillion-won ($4.26 billion) lithium-ion phosphate (LFP) battery supply deal with an overseas client.

In a regulatory filing, LGES said it will supply LFP batteries to the unnamed client for three years, from Aug. 1, 2027, to July 31, 2030.

The contract value is equivalent to 23.2 percent of the company's annual sales of 25.6 trillion won last year, the filing said.

The contract period and value are subject to change depending on the outcome of further consultations with the client, it added.

Market watchers speculate the client may be Tesla, as the U.S. electric vehicle maker said during its first-quarter earnings call that it was seeking an LFP battery supplier outside of China, citing U.S. import tariffs.

In the United States, LGES operates three battery cell plants in Ohio, Tennessee and Michigan. The Michigan plant currently produces LFP batteries for energy storage systems (ESSs).

LFP batteries are known for their enhanced safety and lower manufacturing costs, though they offer lower energy density and shorter driving range compared with lithium-ion and nickel cobalt manganese batteries typically used by Korean battery makers.