LG Energy Solution Ltd., South Korea’s leading battery maker, announced Wednesday a major supply deal worth 5.9 trillion KRW (4.26 billion USD) for lithium-ion phosphate batteries with an unnamed overseas client.
The contract value represents a significant 23.2 percent of the company’s annual sales, which totaled 25.6 trillion KRW last year.
LGES noted that both the contract period and value are subject to potential adjustments pending further consultations with the client.
Industry analysts are speculating that the client could be Tesla Inc. This speculation stems from Tesla’s recent first-quarter earnings call, where the U.S. electric vehicle giant expressed interest in finding an LFP battery supplier outside of China, citing concerns over U.S. import tariffs.
LGES currently operates three battery cell plants in the United States, located in Ohio, Tennessee, and Michigan. The Michigan facility is already producing LFP batteries, primarily for energy storage systems.
LFP batteries are gaining attention in the industry for their enhanced safety features and lower production costs. However, they do come with trade-offs, offering lower energy density and shorter driving ranges compared to the lithium-ion and nickel cobalt manganese batteries that Korean battery makers typically produce.
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