LG Energy Solution clinched Mercedes-Benz’s largest battery supply agreement to date, winning contracts worth an estimated ₩15 trillion ($10.8 billion) after beating Chinese competitors CATL and Farasis Energy in what industry observers describe as a pivotal moment for South Korean battery dominance.
The Seoul-based manufacturer announced Wednesday it will deliver 107 gigawatt-hours of batteries through two separate contracts: 32 GWh for Mercedes-Benz operations in Europe from 2028 to 2035, and 75 GWh for the German automaker’s US affiliates from 2029 to 2037. The volume represents enough capacity to power roughly 1.5 million Mercedes-Benz electric vehicles.
The victory marks a strategic win for LG Energy Solution’s next-generation 46-series cylindrical battery technology, which delivers five times greater energy density compared to conventional 2170 cells. These batteries will be manufactured at LG’s Arizona facility currently under construction and its existing plant in Wroclaw, Poland.
Mercedes-Benz’s decision reflects a broader shift among European automakers seeking to reduce dependence on Chinese suppliers for critical battery components. The German luxury carmaker’s pivot toward Korean manufacturers aims to strengthen localized production in the US and Europe while potentially mitigating US tariff impacts.
Combined with LG’s previous 50.5 GWh contract signed in October 2024, the battery maker now holds more than 150 GWh in Mercedes-Benz orders valued at over ₩20 trillion. This represents the largest commitment to cylindrical battery technology in LG Energy Solution’s history.
The deals underscore intensifying competition between Korean and Chinese battery manufacturers as automakers diversify supply chains. CATL, which commands a 27.7% share of the global battery market outside China, has rapidly closed the gap with LG Energy Solution’s 28.5% leading position, making strategic partnerships increasingly valuable.
