The agreement marks a significant milestone in the growing demand for EV components, as automakers continue to secure long-term battery supply amid the shift to electrification. Mercedes-Benz’s expanding EV lineup will depend heavily on this deal to power a range of upcoming models in Europe and North America.
This new contract is part of a broader strategy by Mercedes-Benz to accelerate its transition to electric vehicles. Over the next few years, the company plans to launch more than a dozen new or refreshed EV models, a move it views as the largest product launch program in its history. For LGES, the deal reflects the company’s expanding role in the global battery market, underscoring its critical role in the automotive sector’s electrification efforts.
Mercedes-Benz’s Ambitious EV Plans
Mercedes-Benz is actively working to revamp its vehicle lineup, particularly focusing on electric models. According to InsideEVs, the company plans to launch a range of new or refreshed EVs by the end of the decade, with 15 models expected to hit the market.
Among these is the new CLA EV, which will be based on the 800-volt Mercedes Modular Architecture (MMA), and the GLC with EQ Technology, which will ride on the 800-volt MB.EA platform.
These models are just the beginning of a broader shift, as Mercedes-Benz plans to depart from its traditional car designs like the EQS and EQE, which received a lukewarm reception. The battery order from LGES is crucial in ensuring that these new models are properly equipped to meet the demands of the growing EV market.
A Multi-Billion Dollar Battery Agreement
The deal between LGES and Mercedes-Benz spans from March 2028 through June 2035, providing batteries for Mercedes-Benz’s EVs in both Europe and North America. The order is valued at $1.4 billion, highlighting the long-term nature of the partnership.
This is not the first time the two companies have worked together this year. Earlier, LGES secured another contract with Mercedes-Benz for the supply of 32 gigawatt-hours of batteries by 2035, along with an additional 75 GWh for a Mercedes-Benz affiliate by the end of 2037. These agreements showcase LGES’s growing prominence as a key supplier in the automotive industry.
LG Energy Solution’s Growing Role in the EV Industry
The deal with Mercedes-Benz is part of a broader trend of increasing demand for EV batteries, with LGES making strides in securing high-value contracts. In addition to its partnership with Mercedes-Benz, LGES also signed a significant $4.3 billion agreement with Tesla for the supply of lithium-iron phosphate energy storage batteries, as reported by Reuters.
LGES is also working with General Motors to develop new battery technologies, including lithium manganese-rich cells, set to power GM’s full-size trucks and SUVs starting in 2028. These collaborations signal that even amid uncertainties, such as potential slowdowns in EV sales or concerns over a battery surplus, companies are continuing to position themselves for long-term success in the electrified future of the automotive industry.
