South Korea’s LG Energy Solution said on Wednesday it has secured a $4.3 billion contract to supply lithium iron phosphate (LFP) batteries globally over a three-year period beginning in August 2027. The company did not disclose the identity of the customer or specify whether the batteries will be used in electric vehicles or energy storage systems.
The agreement, which runs through July 2030, includes an option to extend the duration by up to seven additional years and scale up the volume, depending on future discussions with the unnamed buyer.
The announcement follows growing interest in LFP batteries, which are typically more cost-effective and thermally stable than nickel-based chemistries. LGES, a key supplier to Tesla, General Motors, and Volkswagen, has been expanding its production footprint and diversifying its battery portfolio to remain competitive in the global electric mobility and energy storage markets.
The news comes shortly after LGES reported second-quarter operating profit of 492 billion won ($358.7 million), more than doubling from 195 billion won a year earlier, as customers accelerated purchases ahead of potential U.S. tariffs on Chinese battery materials. The figure exceeded the 298 billion won average estimate compiled by LSEG SmartEstimate.
In a related development, Samsung Electronics recently signed a $16.5 billion deal with Tesla to produce next-generation AI chips at its Texas facility, underscoring increased collaboration between South Korean firms and the U.S. EV maker.
