LG Energy Solution strengthens relationship with Mercedes-Benz through substantial battery agreements

In a significant move, LG Energy Solution, a leading Korean battery manufacturer, has secured a landmark supply contract with Mercedes-Benz, the iconic German luxury automaker. The deal, worth an estimated 15 trillion won ($10.8 billion), marks a pivot from Chinese battery suppliers towards Korean manufacturers for Mercedes-Benz's electric vehicles (EVs) in the US and European markets.

The strategic importance of localized production amid rising tariffs and trade policy uncertainties is evident in this US contract with LG Energy Solution. The EV batteries destined for the US market will be produced at LG Energy Solution's manufacturing facility currently under construction in Arizona, with an annual production capacity of 36 gigawatt-hours.

LG Energy Solution's 46-series battery technology surpasses that of Chinese competitors like CATL and Farasis Energy. The 46-series battery cell delivers at least five times greater energy and power output compared to the conventional 2170 model. The combined supply volume of 107 gigawatt-hours is enough to power roughly 1.5 million Mercedes-Benz EVs.

Mercedes-Benz is making a more decisive shift to Korean battery makers to strengthen localized production in the US and Europe, aiming to improve its sales. The supply volume for Europe is expected to be manufactured at LG Energy Solution's production facility in Wroclaw, Poland.

The deal further cements LG Energy Solution's role as a key strategic battery partner, having secured a cumulative supply of over 150 gigawatt-hours of 46-series batteries with the German luxury automaker. This estimated 15 trillion won agreement represents the largest-ever supply contract for LG Energy Solution's 46-series cylindrical EV batteries.

The company CATL received the largest contract ever closed for 46-series cylindrical module batteries for Mercedes-Benz electric vehicles, and these batteries are produced in Germany and China. However, with LG Energy Solution's local manufacturing capabilities in the US and Europe, the Korean battery-maker is poised to play a significant role in Mercedes-Benz's EV production.

The shift of Mercedes-Benz to Korean battery makers could potentially help Mercedes-Benz compete more effectively with its archrival BMW in the US and European markets. In the first half of 2025, Mercedes-Benz's sales declined, trailing its archrival BMW in both the US and European markets. The latest supply agreements with LG Energy Solution could potentially improve Mercedes-Benz's sales in the competitive US and European markets.

LG Energy Solution's 46-series battery features unit-cell level directional venting technology that enhances safety and prevents chain thermal runaway. This technology underscores LG Energy Solution's commitment to safety and innovation in the EV battery sector.

LG Energy Solution is recognized as the first Korean battery-maker to establish a manufacturing base in the US, with its Holland, Michigan, plant beginning large-scale production in 2022. The company's strategic moves in the US market, such as this deal with Mercedes-Benz, underscore its growing importance in the global EV battery market.