South Korea’s LG to power Mercedes EVs in multi-billion won agreement

LG Energy Solution has secured a deal estimated at 2 trillion won (USD 1.4 billion) to provide electric vehicle batteries to Mercedes-Benz Group AG, reinforcing the growing alliance between the two companies.

According to Pulse, the English edition of Maeil Business News Korea, the 2.06 trillion won deal represents the fourth significant agreement between the two firms in the past two years.

Contract duration and scope

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The report stated on Monday that the battery supply agreement will be in effect from March 1, 2028, to June 30, 2035, and will include shipments to North America and Europe.

The company noted that the final contract amount and timeframe may be adjusted following additional talks with the client.

Revenue impact and strategy

The latest deal accounts for roughly eight per cent of LG Energy Solution’s total revenue of 25.62 trillion won recorded last year.

According to the report, analysts believe this supply deal will mainly support battery production for mid-range and budget EV models, reflecting Mercedes-Benz’s strategy to broaden its customer reach.

Mercedes-Benz, which revealed its electric vehicle plan in September, aims to roll out more than 40 new global models by 2027.

This development has boosted demand for battery solutions across luxury and lower-tier vehicles alike.

During the previous two years, the companies’ partnerships mainly featured LG’s 46-series cylindrical cells, favored in high-performance automobiles.

The deal signals a focus on batteries for lower-priced vehicles, reflecting the company’s broader EV strategy.

The company’s battery lineup ranges from cylindrical 46-series for premium electric vehicles to high-voltage mid-nickel pouch and LFP batteries for mainstream and entry-level cars.

Industry observers note that the new deal could help South Korean battery makers regain market share in Europe and other key regions, where Chinese suppliers have been expanding with lower-cost products.

Global collaboration and innovation

The closer ties with Mercedes-Benz are seen as helping LG Energy Solution broaden its global influence. Earlier in November, Mercedes-Benz Chairman Ola Källenius met LG Group leaders in Seoul to talk about future mobility cooperation.

Källenius stated that both companies share a focus on innovation, quality, and sustainability, and are jointly working to raise the bar for the global automotive industry, the report added.