LG Energy Solution (LGES) has signed a six-year deal to supply 8 gigawatt-hours of 46-series cylindrical batteries to O&J Automotive Netherlands, a subsidiary of China’s Chery Automobile.
This marks the first time a Korean company has won a large-scale contract to sell cylindrical batteries to a Chinese car manufacturer.
The agreement highlights the competitiveness of LGES’s batteries. Chinese automakers usually prefer batteries made in China. Chery has mostly worked with CATL, a leading Chinese battery maker. Chery also owns its own battery brand, Kunpeng, which is developing new all-solid-state battery technology.
Chery chose LGES’s ternary batteries, which use nickel, cobalt, and manganese. These batteries offer higher energy density. The company did not select the more affordable lithium iron phosphate (LFP) batteries, which are commonly produced by Chinese firms.
LGES CEO Kim Dong-myung said, “Providing unique and superior customer value through unmatched technology is the only way to overcome the current slowdown in the electric vehicle market and prepare for the next growth phase.” He added that the contract with Chery is important. LGES plans to use this success to win more orders for its 46-series batteries globally and strengthen its market position.
LGES expects to start delivering batteries to Chery early next year.
The contract’s value was not officially revealed but is estimated to be over 1 trillion won (about $732 million). The battery supply can power around 120,000 electric vehicles.
LGES also said the two companies will keep discussing new projects to expand the use of LGES batteries in other Chery electric vehicles.
