my timesThe Korea Times
  1. Business
  2. Companies

LG Energy Solution lands $1.4 bil. Mercedes-Benz battery deal

Listen
By Lee Gyu-lee
  • Published KST
  • Updated KST
LG Energy Solution’s booth at the RE+ renewable energy convention in Lav Vegas, held from Sept. 8 to 11. Courtesy of LG Energy Solution.

LG Energy Solution’s booth at the RE+ renewable energy convention in Lav Vegas, held from Sept. 8 to 11. Courtesy of LG Energy Solution.

LG Energy Solution has secured a $1.4 billion deal to supply electric vehicle (EV) batteries to Mercedes-Benz.

The company disclosed on Monday that it has signed a battery supply deal with the German carmaker, with the contract value equivalent to about 8 percent of LG Energy Solution’s revenue last year.

The agreement covers battery supplies for Mercedes-Benz EV models in Europe and North America from March 1, 2028, to June 30, 2035.

The company noted in the disclosure that “the contract value and terms may be subject to change based on future discussions with the customer.”

This follows a large-scale supply deal the two companies signed in September. Under that agreement, the Korean company committed to providing a total of 107 gigawatt-hours (GWh) of batteries to Mercedes-Benz — 75 GWh to an affiliate from July 30, 2029, to Dec. 31, 2037, and 32 GWh to the group from Aug. 1, 2028, to Dec. 31, 2035.

The two sides have maintained a close partnership on EV batteries. Last month, LG Energy Solution CEO Kim Dong-myung and chief executives from LG Group affiliates met with Mercedes-Benz Chairman Ola Kaellenius at the group’s headquarters in Seoul.

The discussions with Kaellenius covered software-defined vehicles, in-vehicle artificial intelligence (AI) agents, batteries and more. He also expressed intent to build future collaboration around integrated automotive component solutions across LG companies.

Thanks to next-generation EV battery contracts with automakers such as Mercedes-Benz, along with expanded local production capacity for energy storage systems, the company has been improving its profitability.

It reported strong third-quarter results, posting a revenue of about 5.7 trillion won ($3.89 billion) and an operating profit of 601.3 billion won — marking its second consecutive quarter in the black even without tax credits under the U.S. Inflation Reduction Act.