L&F's Tesla Deal Dwindles: Battery Contract Slashed to Near Zero

South Korean battery materials producer L&F Co. sees its massive $2.68 billion agreement with Tesla reduced to merely $6,808. The reduction results from shifts in the electric vehicle market. L&F aims for flexibility in response to the changing landscape, maintaining competitiveness despite the setback.

In a surprising development, South Korean battery materials manufacturer L&F Co. announced a drastic reduction in its high-profile contract with Tesla on Monday. The agreement, originally valued at 3.83 trillion won ($2.68 billion), has diminished to a paltry 9.73 million won ($6,808), effectively severing ties between the two companies. Signed in February 2023, the deal was set to span two years, starting January 2024, where L&F committed to supplying high-nickel cathode materials for Tesla's electric vehicles.

The high-nickel cathode materials, pivotal for high-performance electric car batteries, are known for storing more energy efficiently. L&F, recognized for its cutting-edge technology, also collaborates with South Korean giants like LG Energy Solution and SK On. The abrupt contract reduction, L&F states, stems from unavoidable changes in global electric vehicle trends and battery supply dynamics, with industry insiders attributing this to Tesla's deceleration in in-house battery production.

Despite the setback, L&F reassured stakeholders of the stability in its flagship NCMA95 high-nickel product shipments, committed to adaptability amid evolving market demands. Following this disclosure, L&F shares experienced a substantial 9.1% drop to 94,000 won in after-hours trading on NEXTRADE.

(With inputs from agencies.)