The transition to electric vehicles continues unabated in the automotive world. Manufacturers are forging critical partnerships to meet the energy needs of their future models. In this context, Mercedes-Benz has taken a significant step to strengthen its supply chain. The German manufacturer has signed a multi-billion dollar contract with LG Energy Solution as part of the Mercedes battery agreement.

What does the Mercedes battery agreement entail?

According to a statement by LG Energy Solution, the two companies have signed a seven-year supply agreement, starting in March 2028 and running until June 2035. The total value of this agreement is estimated to be approximately $1.4 billion. The batteries in question will be used in Mercedes’ electric vehicles in the North American and European markets.

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This signing further deepens the collaboration between the two giant companies. LG had previously negotiated with Mercedes last September. The agreement at that time included the supply of 32 GWh of batteries by 2035 and an additional 75 GWh by the end of 2037. With these strategic moves, Mercedes aims to secure production for the broad range of electric vehicles it plans to launch by 2030.

Mercedes is focusing not only on battery supply but also on the architecture of its vehicles. The company is abandoning the criticized “egg” design used in the EQS and EQE models. Instead, it’s introducing a family of electric vehicles built on entirely new platforms with more modern lines. Among the 15 new models to be launched in the coming years, the CLA EV, which uses the 800-volt MMA platform, and the GLC, which uses the MB.EA platform, stand out.

On the LG Energy Solution front, things are moving very fast. The company is working closely not only with Mercedes but also with other major players in the industry. The company has a $4.3 billion lithium-iron phosphate battery agreement with Tesla and is also working with General Motors on next-generation cells. While the electric vehicle market may experience short-term fluctuations, these large-scale agreements demonstrate confidence in the future of the sector.

So, what are your thoughts on the Mercedes battery agreement? Share your thoughts with us in the comments!