LGES and Mercedes-Benz sign a major agreement for the supply of battery cells

LG Energy Solution (LGES), the South Korean battery cell supplier giant, has closed its third major supply agreement with Mercedes-Benz in just eighteen months. The new contract, disclosed through a regulatory filing by the company, amounts to roughly 2 trillion won, which equates to about 1.17 billion euros, and covers the delivery of electric vehicle battery cells to Mercedes-Benz plants in both North America and Europe over seven years, from March 1, 2028, to June 30, 2035.

Although LGES warns that both the amount and the duration could be adjusted, this deal represents nearly 8 percent of the revenue the company earned in 2024, which was 25.62 trillion won. To avoid any confusion, it is important to clarify that it has not yet been specified whether LGES will supply only cells or complete battery packs, nor the exact format or chemistry of the cells.

Several South Korean media outlets agree that this contract is likely aimed at the German manufacturer’s mid-range and entry-level electric models, unlike the two previous agreements signed in October 2024 and September 2025, which according to the most recent reports would correspond to 46-series cylindrical cells intended for high-performance and luxury models. If this information is confirmed, the two previous contracts would add up to almost 160 GWh of these cylindrical-format cells.

Mercedes-Benz’s new strategy

The fact that the timelines of the new agreement overlap with the previous ones reinforces the hypothesis that Mercedes-Benz is diversifying formats and suppliers to cover its entire electric range, from its most affordable models to its highest-performance ones.

The September contract, in particular, was won after a fierce bidding process in which LGES prevailed over Chinese manufacturers such as CATL and Farasis, which already regularly supply the Stuttgart brand. Although Mercedes-Benz participates in the European ACC consortium to produce its own batteries, projected demand far exceeds the planned capacity, especially after two of the three planned gigafactories were halted and the third, in Italy, is at risk of being permanently cancelled.

Following the signing of three consecutive agreements, the relationship between the two companies is stronger than ever. In mid-November 2025, Mercedes-Benz CEO Ola Källenius traveled to Seoul to meet with LG Group executives. After the meeting, Källenius highlighted the shared vision in innovation, quality and sustainability, and stated that Mercedes-Benz and LGES are working together to set new standards for the global automotive industry.