The logo of LG Electronics is seen connected the opening time of the Integrated Systems Europe accumulation successful Barcelona connected January 31, 2023.
Pau Barrena | Afp | Getty Images
South Korea-based LG Energy Solution announced Wednesday that it had signed a $4.3 cardinal declaration for supplying batteries to a large corporation, without naming the customer.
The effectual day of declaration — receipt of orders — was Tuesday and it volition reason astatine the extremity of July, 2030. During this period, the counterparty volition not beryllium disclosed to support concern confidentiality, the company's filing with the Korea Exchange showed Wednesday. Reuters reported that Tesla was the counterparty.
Earlier this week, Tesla CEO Elon Musk confirmed that the EV shaper was down a previously undisclosed $16.5 cardinal spot declaration with South Korea's Samsung Electronics.
LG Energy Solution said successful its filing that details of the statement specified arsenic the woody magnitude were taxable to alteration and the declaration play could beryllium extended by up to 7 years.
The worth of the disclosed declaration eclipses the company's 5.6 trillion Korean won ($4.05 billion) gross for the 2nd 4th of this year.
"Investors are advised to cautiously see the anticipation of changes oregon termination of the declaration erstwhile making concern decisions," the institution cautioned. It's shares traded up 0.26% connected Wednesday.
The filing did not clarify whether the lithium robust phosphate batteries would beryllium utilized successful vehicles oregon vigor retention systems. Its large artillery customers see American electric-vehicle makers Tesla and General Motors.
The institution has been expanding its manufacturing successful the U.S., with its archetypal North American ESS artillery manufacturing hub, located successful Michigan, coming online successful the 2nd 4th of this year. The institution is besides constructing a plant successful Arizona that volition nutrient lithium robust phosphate batteries.
The woody is 1 of LG Energy Solution's largest lithium robust phosphate contracts to date, and is expected to beryllium tied to the Michigan works which precocious began production, Liz Lee, an subordinate manager astatine Counterpoint Research told CNBC.
"While LGES has lagged Chinese players successful EV [lithium robust phosphate], this large U.S. ESS bid volition assistance offset that and signals increasing traction successful the US vigor retention market," she said.
Assuming that Tesla is the counterparty, it would acceptable their antecedently stated extremity of reducing reliance connected China for ESS batteries, she added.
LG Energy Solution declined to remark connected details of the deal. Tesla did not respond to CNBC's petition for comment.
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