Mercedes Bets Big on Electric Future with Massive LG Battery Deal
The Mercedes-Benz LG battery deal will position the luxury automaker at the forefront of the next decade with some of the best batteries in the industry.
Mercedes-Benz just locked in a $1.4 billion battery supply agreement with LG Energy Solution, covering their European and North American EVs through 2035. This marks the second billion-dollar deal between the companies this year and signals strong confidence in electric vehicle demand despite market uncertainty. With over 15 new or refreshed EVs planned for launch by 2027, including the CLA EV and GLC with EQ Technology, Mercedes is making it clear they’re all-in on batteries. The deal covers high-voltage battery packs for the automaker’s next generation of EVs built on 800-volt platforms.
A huge deal amid an uncertain EV world
The demand for EVs had declined, and the United States has turned away from electric vehicle development for the near future. In the United States, the sudden loss of the $7,500 EV Federal Tax Credit is a huge blow to the electric vehicle market.
Despite these challenges, Mercedes-Benz inked a huge deal to shore up its electric vehicle supply chain with LG Energy Solution supplying Mercedes EV batteries for the foreseeable future. EV battery demand seems to be high, as many automakers expect to return to significant demand for EVs, as evidenced by the number of automotive battery contracts that have been agreed to recently.
The electric platforms are secure with the Mercedes-Benz LG battery deal
The massive battery deal will ensure the Mercedes CLA EV, which rides on the MMA platform, and the GLC EQ, which uses the MB.EA platform will have the desired power and technology for seven years, beginning in March 2028. Although the contract covers Europe and North America, other markets could also be covered by this deal, and the terms could change based on need. The biggest takeaway is that the desire for batteries and either a significant partner or automaker-owned battery manufacturing facilities is strong and continues to grow.
LG is on a roll
This is the second order secured by LG from a German automaker this year. The previous contract comes from a Mercedes-Benz affiliate that will receive batteries totaling 32 gigawatt-hours by 2035 and another 75 GWh by the end of 2037.
In addition to the battery deals with Mercedes-Benz, LG has also secured a $4.3 billion deal with Tesla for lithium-iron phosphate energy storage batteries. It’s also developing new batteries with GM, which are lithium manganese-rich cells for full-size trucks and SUVs beginning in 2028.
With its battery supply secured, Mercedes-Benz can focus on a large-spectrum launch of EVs between now and the end of the decade. Now that we have reached the halfway point of the decade, things could move forward into the EV world very quickly. Mercedes-Benz is also moving away from the current EV lineup, which brings bland styling to the market. The new generation EVs should have completely new designs, and some will have bespoke platforms that provide them with unique styles, which brings back the boldness of the brand’s identity.
The Mercedes-Benz LG battery deal opens the doors for new EVs
The first of the new Mercedes-Benz EVs to arrive will be the CLA EV. It uses an 800-volt MMA platform and should appear in the first quarter of the year. The GLC with EQ Technology also has an 800-volt platform, but it’s the MB.EA model. The GLC should be on the market before the end of next year.
After these first two models, the brand has 15 new or refreshed models that are intended as part of the rollout over the next couple of years. This should be the largest product launch in the history of Mercedes-Benz, which is saying a lot since the automaker dates back to the beginning of the automotive industry.
Is the future electric?
With several billion-dollar deals secured, LG is leading the way for electric vehicle batteries going forward. The Mercedes-Benz LG battery deal is only the most recent of these deals, creating a partnership that will last into the middle of the next decade. Many automakers are betting on a return to EV demand, and some have predicted this with partnerships like this one. As batteries continue to evolve and improve, the potential for EVs to be the future continues, but that future is still uncertain.
Will the automotive industry see a slow build to increased demand for EVs, or will electric vehicles become a footnote in the history of the industry?
