LG Energy Solution secured its first substantial foothold in China’s electric vehicle market through a six-year battery supply agreement with Chery Automobile, marking a breakthrough for the South Korean company in the world’s largest EV market.
The deal calls for LG Energy to provide 8 gigawatt-hours of its next-generation 46-series cylindrical batteries from 2026 through 2030, enough to power approximately 120,000 electric vehicles. Industry observers estimate the contract value at around 1 trillion won ($730 million), though LG Energy declined to disclose financial terms.
China represents the world’s largest electric vehicle market, accounting for 10.79 million of the 16.23 million EVs sold globally last year. The Chinese EV battery market remains dominated by domestic manufacturers, with CATL holding a 45.9 percent share, BYD commanding 22.5 percent, and CALB capturing 7.5 percent.
The agreement represents a significant challenge to that dominance. LG Energy Solution’s supply of cylindrical batteries to one of China’s top five automakers has begun to crack the impregnable fortress of Chinese battery manufacturers. LG Energy Solution maintained its position as the world’s third-largest battery supplier with a 10.8 percent global market share in 2024, but has struggled to gain traction in China specifically.
The 46-series cylindrical batteries offer over five times the energy capacity and output of conventional cylindrical cells. LG Energy previously supplied the same battery type to Rivian, but this marks its first supply contract with a Chinese automaker for the advanced technology.
Chery, a state-owned automaker based in Wuhu, reported a 38.4 percent jump in 2024 sales to 2.6 million vehicles, maintaining its position as China’s top car exporter with 1.14 million units shipped to foreign markets. The company ranked fourth among Chinese brands in April with 95,000 domestic passenger vehicle sales.
The batteries will be supplied from LG Energy’s Poland factory to Chery’s European subsidiary O&J Automotive in Spain, helping comply with EU subsidy policies. The arrangement suggests both companies are positioning for Chery’s European expansion, where the Chinese automaker plans to launch multiple brands by 2026.
While the deal represents progress for LG Energy in China, the company faces intensifying competition as Chinese battery makers rapidly expand production capacity and Chinese automakers increasingly favor domestic suppliers for their home market operations.
