Global battery major LG Energy Solution (LGES) has secured a significant electric vehicle (EV) battery supply contract worth approximately USD 1.4 billion with Mercedes-Benz Group AG, further strengthening their long-standing strategic partnership in the global electric mobility space. The agreement reinforces LGES’s position as a key battery supplier to premium automakers amid accelerating EV adoption worldwide.
Long-Term Battery Supply for Mercedes-Benz EVs
Under the latest agreement, LG Energy Solution will supply EV batteries to Mercedes-Benz for use in its upcoming electric car models, primarily targeting markets in Europe and North America. The supply period is expected to run from 2028 through 2035, although final volumes and timelines may be adjusted based on future negotiations and market conditions.
The deal is estimated to account for nearly 8 percent of LG Energy Solution’s annual revenue, underscoring its strategic and financial importance for the South Korean battery manufacturer.
Focus on Expanding Mid-Range and Entry-Level EVs
Industry sources indicate that the new contract may focus on batteries for Mercedes-Benz’s mid-range and entry-level electric vehicles, complementing earlier agreements that largely catered to premium EV models. The batteries supplied under this deal are expected to include advanced lithium-ion chemistries, potentially including cost-efficient lithium iron phosphate (LFP) solutions, supporting Mercedes-Benz’s goal of expanding EV affordability and scale.
Earlier in 2025, LG Energy Solution and Mercedes-Benz had signed multiple long-term battery supply agreements covering over 100 GWh of capacity, sufficient to power more than 1.5 million electric vehicles.
Strengthening EV Supply Chains
For Mercedes-Benz, the agreement ensures a stable and diversified battery supply as the automaker advances its electrification roadmap. The company plans to introduce more than 40 electric models globally by the end of the decade, making long-term battery partnerships critical to production certainty and cost optimization.
For LG Energy Solution, the contract highlights growing global demand for non-Chinese battery suppliers, as automakers seek to diversify supply chains and reduce geopolitical risks. LGES continues to expand its footprint across cylindrical, pouch, and prismatic battery technologies to meet varied OEM requirements.
Impact on the Global EV Market
The agreement reflects broader trends in the global EV ecosystem, where automakers are prioritizing long-term battery sourcing to secure competitiveness amid rising demand. By focusing on scalable and cost-effective battery solutions, Mercedes-Benz is positioning itself to accelerate EV adoption beyond the luxury segment, while LG Energy Solution strengthens its standing among the world’s leading battery manufacturers.
Driving the Next Phase of Electric Mobility
As EV competition intensifies, partnerships such as this USD 1.4 billion deal between LG Energy Solution and Mercedes-Benz are expected to play a pivotal role in shaping the future of electric mobility. The collaboration not only supports the rollout of next-generation electric cars but also contributes to the development of a resilient, globally integrated EV supply chain.
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