4680 Battery | LG Energy Solution and Mercedes-Benz Secures Large Battey Deal worth Multi-Billion Dollars

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4680 Battery | LG Energy Solution and Mercedes-Benz Secures Large Battey Deal worth Multi-Billion Dollars

Date：2024-10-10

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Keyword tags： 4680 LiB EV NA

According to recent public media, that South Korean electric vehicle (EV) battery manufacturer LG Energy Solution (LGES) has secured a significant battery supply deal with the German luxury automotive manufacturer Mercedes-Benz, estimated to be worth billions of dollars.

According to a regulatory filing by LGES on Tuesday, the company has signed a contract with an affiliate of Mercedes-Benz to supply 50.5 gigawatt-hours of batteries from January 2028 to December 2038, in North America and other markets. This volume is sufficient to equip 630,000 electric vehicles.

It is reported that a senior executive at LGES stated that the deal provides the company with an "opportunity to outcompete Chinese rivals."

South Korean industry sources estimate the value of the deal to be in the billions of dollars, but LGES has declined to disclose specific details such as the transaction terms and amounts, citing confidentiality agreements with customers.

Reports indicate that LGES plans to supply Mercedes-Benz with the 46-series large cylindrical batteries, which will be produced at LGES's battery complex in Arizona. LGES began construction of a dedicated production line for high-performance batteries at its Arizona battery factory complex in April of this year, with plans to complete the facility by 2027.

Once fully operational, LGES Arizona battery factory complex is expected to have an annual production capacity of 53GWh, including 36GWh of cylindrical batteries and 17GWh of lithium iron phosphate (LFP) energy storage batteries. In addition to this, LGES operates an independent battery factory in Michigan and has established five joint venture battery factories with major automotive manufacturers in North America, including General Motors, Honda, Hyundai, and Stellantis.

The 46-series large cylindrical batteries, compared to the 2170 cylindrical batteries, are said to offer five times the energy density and six times the power output. Typically, an electric vehicle requires 3,000-4,000 pieces of 2170 cylindrical batteries, but with the 46-series batteries, only 600-1,300 pieces would be needed. This significantly reduces the weight of the vehicle, increases efficiency by over 20%, and, with more ventilation space, greatly reduces the risk of thermal runaway, enhancing the safety performance of electric vehicles.

Earlier this year, it was reported that LGES's initial production capacity for 4680 batteries at its Ocang factory in South Korea is 8GWh per year, sufficient to supply the production of up to 110,000 electric vehicles annually. LGES is set to begin mass production of 4680 batteries in the second half of this year and plans to start supplying Tesla from December this year.

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