LG Energy cracks China's cylindrical battery market with Chery deal

LG Energy Solution Ltd. said on Monday it has signed a six-year contract with Chery Automobile Co. to supply 8 gigawatts per hour (GWh) of next-generation cylindrical batteries, expanding its customer base for high-performance cells into China.

The deal, which industry watchers estimate at 6 trillion won ($4.4 billion), has marked the first contract by a South Korean company to supply a substantial volume of 46-series cylindrical batteries to a Chinese carmaker. 

The 46-series battery, which has a diameter of 46 millimeter, is considered a next-generation form factor. These batteries will be installed on Chery’s flagship models, with deliveries set to begin early next year. The volume supplied will be sufficient to power some 120,000 vehicles.

“This supply agreement with Chery Automobile marks a significant milestone that will serve as a catalyst for expanding orders of our new 46-series form factor globally,” Kim Dong-myung, chief executive of LG Energy Solution, said in a press release. 

In addition to the supply deal, the two companies will explore expanding their partnership to include other Chery Automobile models, according to LG Energy.

In November last year, LG Energy inked a five-year supply agreement with Rivian Automotive Inc., a US EV manufacturer, for 46-series cylindrical batteries, in a deal estimated at $6.7 billion.

The 46-series batteries deliver at least five times higher energy capacity and output compared with conventional cylindrical batteries, while offering higher energy density to boost driving range and performance.

They also feature rapid charging and discharging capabilities, alongside advanced thermal management.

“This contract validates LG Energy Solution's proprietary NCM (nickel cobalt manganese) 46-series technology, which outperforms LFP alternatives in cold-weather conditions with superior power output and charging efficiency," LG said in the press release.

NCM is short for nickel, cobalt and manganese, while LFP stands for lithium iron phosphate.

Early this year, LG Energy unveiled its upgraded 46-series cylindrical batteries, along with new module and pack solutions designed to further maximize their performance at InterBattery 2025, South Korea's largest battery industry trade show.

Write to Yeonhee Kim at yhkim@hankyung.com