LG Energy Solution Wins $10.7B Mercedes-Benz EV Deal

 

LG Energy Solution (LGES) has signed new agreements to supply 107 GWh of EV batteries to Mercedes-Benz for use in Europe and the US, in deals worth around US$10.7 billion.

Under the contracts, LGES will supply 32 GWh to Europe between August 2028 and December 2035, and provide batteries to Mercedes’ US affiliate from July 2029 to December 2037. This follows a previous deal in October 2024, where LGES agreed to deliver 50.5 GWh of batteries to Mercedes for North America and other regions between 2028 and 2038. Together, these contracts mark one of the largest battery supply commitments in the EV sector.

Key Highlights

• LGES signs $10.7B deal to supply 107 GWh EV batteries to Mercedes
• Mercedes shifts from Chinese suppliers after battery fire incident
• LGES strengthens premium market position with advanced 46-series cells

The shift comes after a fire incident involving Farasis Energy batteries in a Mercedes EQE sedan that destroyed over 100 vehicles in South Korea, prompting the German automaker to move away from Chinese suppliers like CATL and Farasis Energy. Mercedes is now prioritizing safety and technology over lower costs, securing LGES despite its premium pricing.

While Chinese companies like CATL dominate 37 percent of the global EV battery market, LGES holds 14.5 percent market share but is winning high-value contracts by competing on technology and safety. LGES has also signed major deals with Tesla (US$4.3 billion) and Toyota, strengthening its presence in premium segments.

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LGES will also start producing its next-generation 46-series cylindrical batteries at its Arizona plant in 2026, a technology expected to power Mercedes’ future EVs and reinforce its position in Western markets.