LG Energy Solution shares down 2%

LG Energy Solution shares down 2%

September 02, 2025

LG Energy Solution Ltd., one of the world's leading battery manufacturers, saw its shares fall by 2% today, following a significant order win from Mercedes-Benz. The South Korean company has secured a deal to supply electric vehicle (EV) batteries to the German automotive giant, estimated to be worth 15 trillion won ($10.8 billion) [1].

The contract involves supplying a total of 107 gigawatt-hours (GWh) of batteries, with 32 GWh to Mercedes-Benz AG in Europe from August 1, 2028, to the end of 2035, and 75 GWh to the German automaker's affiliates in the US from July 30, 2029, through the end of 2037 [1]. This is LG Energy's single largest order to date for its cylindrical 46 series cells, which are expected to be produced at its dedicated cylindrical battery plant under construction in Arizona [1].

The contract represents a strategic win for LG Energy Solution, highlighting its technological edge over Chinese rivals such as Contemporary Amperex Technology Co. Ltd. (CATL) and Farasis Energy Co. [1]. The deal underscores Mercedes-Benz's commitment to diversifying supply chains and securing capacity in both Europe and the US, where demand for premium EVs is expected to rise [1].

Despite the positive news, LG Energy Solution's shares have dipped by 2% today, potentially due to market concerns over the company's ability to meet the growing demand for EV batteries. The company's expansion in North America, including its $5.5 billion cylindrical battery plant in Arizona, positions it well to capture U.S. Inflation Reduction Act (IRA) tax credits and address surging demand for high-performance cylindrical batteries [2].

The company's focus on technological innovation, sustainability, and strategic partnerships is likely to support its long-term growth potential. LG Energy Solution's investment in next-generation technologies and its commitment to sustainability, including a 100% renewable energy target by 2030 and a 97.4% 2024 recycling rate, align with global decarbonization policies and enhance its ESG appeal [2].

Investors should closely monitor LG Energy Solution's ability to execute on its expansion plans, manage production costs, and navigate the competitive landscape. The company's strategic dominance in the global EV battery market is likely to continue, driven by its technological edge, supply chain resilience, and sustainability initiatives.

References:
[1] https://www.kedglobal.com/batteries/newsView/ked202509030009
[2] https://www.ainvest.com/news/lg-energy-solution-strategic-dominance-global-ev-battery-market-2509/