South Korea's L&F has reportedly slashed the value of its battery materials supply agreement with Tesla (TSLA) to just $7,386, down from the $2.9 billion projection announced in 2023.
According to Reuters, the company had originally agreed to supply high-nickel cathode materials to Tesla and its affiliates from January 2024 through December 2025, with expectations that the materials would be used in Tesla's in-house 4680 battery cells. L&F did not provide a reason for the drastic reduction.
Analysts said the cut likely reflects Tesla's difficulties in ramping up production of its 4680 batteries and weaker-than-expected demand for electric vehicles. Tesla currently uses the cells in its Cybertruck, which has underperformed sales expectations, and the company has acknowledged challenges in scaling up its dry electrode manufacturing process.
The reduction comes amid broader strain across South Korea's battery sector. Industry analysts said production yield issues and slowing EV growth have led automakers to reduce or cancel battery orders. Several suppliers have already reported cancellations or downsizing of joint ventures following the end of U.S. federal EV subsidies in September.
LG Energy Solution is expected to lose about 13.5 trillion won in revenue after Ford and Freudenberg terminated supply contracts, while SK On has decided to end its battery joint venture with Ford in the United States. Ford has also announced a $19.5 billion writedown and plans to scrap multiple electric vehicle models, underscoring a wider pullback from EV investments as policy uncertainty and weakening demand reshape the industry.
Monday, TSLA closed at $459.64, down 3.27%, and is trading after hours at $458.34, lower by 0.28%, on the NasdaqGS.
For comments and feedback contact: editorial@rttnews.com
Business News
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.