LG Energy Solution Signs Six-Year Battery Supply Deal with Chery

China Chery

LGES to Deliver 8GWh of Cylindrical Batteries

LG Energy Solution (LGES) has signed a six-year deal with China’s Chery Automobile to supply 8GWh of batteries. Deliveries are scheduled to begin in early 2026, powering around 120,000 electric vehicles. The agreement focuses on LGES’ 46-series nickel-cobalt-manganese cylindrical batteries, which will be installed in Chery’s flagship EV models.

The partnership also leaves room for expansion. LGES indicated that further projects could extend to additional Chery models, reinforcing the growing collaboration between one of South Korea’s top battery producers and China’s state-owned automaker.

Strategic Partnerships in a Competitive Battery Market

The LGES-Chery deal highlights the company’s efforts to secure long-term partnerships amid shifting battery demand. In November 2024, LGES struck a five-year, 67GWh agreement with US EV start-up Rivian, with production centered in Arizona. These contracts demonstrate LGES’ dual strategy of supporting premium EV manufacturers while also pursuing cost-competitive alternatives.

However, the rise of lithium-iron-phosphate (LFP) batteries has reshaped the competitive landscape. LGES announced it will start mass production of LFP batteries for EVs in the second half of 2025. In parallel, it began mass-producing LFP batteries for energy storage systems (ESS) in the US this June, while partially converting its Wroclaw plant in Europe for ESS applications.

The Metalnomist Commentary

LGES’ deal with Chery underscores the importance of strategic alliances in an increasingly competitive EV battery market. By balancing high-performance nickel-based batteries with cost-efficient LFP solutions, LGES is positioning itself to meet diverse global demand. The company’s ability to maintain utilization rates will hinge on how effectively it scales production and navigates price pressures.