LG Energy Solution secures $1.4 billion EV battery deal with Mercedes-Benz

South Korea’s LG Energy Solution has signed a $1.4 billion (2.06 trillion won) deal with Mercedes-Benz Group AG to supply batteries for electric vehicles (EVs), marking the fourth major contract between the two companies in just two years.

The agreement, set to run from March 2028 to June 2035 , will cover battery deliveries to North America and Europe , although the company noted that the value and duration could be adjusted through further discussions. The deal represents around 8% of LG Energy Solution’s total revenue of 25.62 trillion won last year, underscoring its significance for the South Korean battery maker.

The deal was finalized after direct discussions between Mercedes-Benz Chairman Ola Kallenius and LG Group affiliates in Seoul in mid-November , reflecting the deepening collaboration between the two companies.

Industry analysts say the supply will focus on batteries for mid- to entry-tier EV models , signaling Mercedes-Benz’s push to expand its EV portfolio beyond premium vehicles . While previous contracts largely involved LG’s cylindrical 46-series batteries for high-performance models, this new deal includes high-voltage mid-nickel pouch batteries and lithium iron phosphate units for more affordable vehicles.

Experts note that Mercedes-Benz likely chose LG Energy Solution for its proven track record, diverse battery portfolio, technological expertise, and global production capabilities . LG’s established presence in key markets, including Europe and North America, ensures efficient supply chains , which is crucial as the automaker ramps up its plan to launch over 40 new EV models globally by 2027 .

The agreement also strengthens LG’s competitive position in Europe , where Chinese battery makers have been expanding aggressively with lower-cost products. The deeper collaboration is viewed as a strategic move to enhance LG’s global footprint and reinforce its status as a leading EV battery supplier.

Mercedes-Benz has emphasized that both companies share a vision rooted in innovation, quality, and sustainability , highlighting LG’s alignment with its long-term electrification roadmap.