Key Takeaways
- Mercedes-Benz has secured a $1.4 billion battery supply deal with LG Energy Solution for EVs through 2035.
- The automaker plans to launch 15 new or refreshed electric vehicle models by the end of the decade.
- Despite concerns about EV demand, the battery market remains robust, as indicated by substantial contracts with other automakers.
Mercedes-Benz Expands Electric Vehicle Battery Supply
Mercedes-Benz is bolstering its electric vehicle (EV) capabilities by securing significant battery supply contracts, notably a recent $1.4 billion agreement with LG Energy Solution (LGES). This deal spans a seven-year period, from March 2028 to June 2035, and will supply batteries for Mercedes-Benz EVs across Europe and North America. The terms may evolve, but the contract reflects a strong ongoing demand for EV batteries.
This latest agreement marks LGES’s second partnership with Mercedes-Benz this year. In September, LGES announced it would provide 32 gigawatt-hours of battery capacity by 2035, along with an additional 75 gigawatt-hours to a Mercedes-Benz affiliate by the end of 2037. Such commitments underline the automaker’s confidence in the future of the EV market, despite concerns about a potential slowdown in sales or an oversupply of batteries.
As part of its ambitious electrification strategy, Mercedes-Benz plans to introduce a diverse range of EVs through the end of the decade. The company aims to transition from its current models, such as the EQS and EQE, which have not received enthusiastic market responses, to a new generation of redesigned vehicles utilizing bespoke platforms.
The upcoming CLA EV, which utilizes the 800-volt Mercedes Modular Architecture (MMA), is set to launch in the first quarter of next year, while the GLC with EQ Technology is expected by late next year. These models are part of what Mercedes-Benz describes as its “biggest product launch program” in history, with a total of 15 new or refreshed models on the way. The recent deal with LGES is expected to support the battery requirements for this extensive launch.
Despite facing regulatory challenges, such as changes to the $7,500 federal tax credit and uncertainty in fuel economy regulations, LGES has experienced a prosperous year. The company recently entered a $4.3 billion agreement with Tesla for lithium-iron phosphate energy storage batteries and is collaborating with General Motors to develop lithium manganese-rich cells for future full-size trucks and SUVs starting in 2028.
Overall, while the EV market may face short-term contractions, the high value of these orders signifies a strong belief among automakers that the future vehicle landscape will be increasingly dominated by battery-powered options. This trend highlights the long-term vision of major players like Mercedes-Benz and LG Energy Solution as they forge ahead in the competitive world of electric mobility.
The content above is a summary. For more details, see the source article.
