LG Energy Solution has signed a major battery supply agreement worth approximately 2.06 trillion won ($1.4 billion) with Mercedes-Benz Group, further strengthening the companies’ partnership.
According to a report by Pulse, this marks the fourth significant contract between the South Korean battery producer and the German automaker in the past two years.
The long-term deal will run from March 1, 2028, to June 30, 2035, covering battery deliveries for Mercedes-Benz electric vehicles in North America and Europe. LG Energy Solution noted that the value and duration of the contract may be adjusted depending on future discussions.
The agreement represents around 8% of LG Energy Solution’s revenue of 25.62 trillion won last year. Analysts cited in the report believe the new supply will focus on batteries for mid- to entry-tier electric vehicle models, suggesting Mercedes-Benz is broadening its EV lineup to reach a wider market segment.
Mercedes-Benz, which unveiled its latest electrification roadmap in September, plans to introduce more than 40 new models globally by 2027. This expansion has increased demand for battery technologies across both premium and more affordable EV categories.
In recent years, the two companies’ contracts have centered on LG’s cylindrical 46-series batteries, typically used in high-performance vehicles. The latest deal is viewed as a move toward supplying batteries for more cost-accessible models, aligning with the automaker’s expanded EV ambitions.
LG Energy Solution offers a diverse range of products, including high-voltage mid-nickel pouch batteries and lithium iron phosphate options for standard or lower-priced vehicles. Its expanding production footprint and technology portfolio have strengthened its position in global markets.
Industry observers say the new agreement could bolster South Korea’s battery sector in Europe and other key regions where Chinese manufacturers have been gaining ground with competitively priced products. The strengthened partnership with Mercedes-Benz is seen as a strategic step in enhancing LG Energy Solution’s global presence.
The report noted that ahead of the deal, Mercedes-Benz Chairman Ola Kallenius met LG Group executives in Seoul in mid-November to discuss future mobility cooperation. Kallenius said the two companies share a commitment to innovation, quality, and sustainability, and are working together to set new industry standards.
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