LG Energy Solution has mutually agreed to terminate a 3.9 trillion won battery supply contract with Freudenberg Battery Power Systems, the company said in a regulatory filing on Friday. The decision follows Freudenberg’s decision to discontinue its battery business, prompting both parties to end the arrangement.
This announcement comes just one week after LG Energy Solution disclosed that Ford Motor Company had canceled a separate electric vehicle battery supply agreement worth approximately 9.6 trillion won. Ford indicated it will record a $19.5 billion writedown and discontinue several EV models, citing weakening consumer demand and shifts in government policy.
Together, these two contract terminations represent a loss of about 13.5 trillion won in anticipated revenue for LG Energy Solution within a ten-day span—more than half of the 25.62 trillion won the company reported in revenue last year. The rapid succession of cancellations underscores the challenges facing battery suppliers as automakers reassess their EV lineups and production commitments.
In a separate move to streamline its North American operations, LG Energy Solution announced on Wednesday that it will sell a manufacturing facility and related assets in Ohio to Honda Development and Manufacturing of America for $2.86 billion. The transaction is aimed at enhancing operational efficiency within their existing joint venture and supporting future collaborations on battery production.
Industry analysts view these developments as indicative of broader market adjustments. Automakers are increasingly balancing investment in electric mobility against profitability pressures and evolving regulatory incentives. Battery producers, in turn, are navigating shifting demand forecasts, supply-chain dynamics, and strategic partnerships.
Source: Reuters
