LG Energy Solution Ends Strategic EV Battery Supply Agreement Following Freudenberg's Market Exit

LG Energy Solution has formally concluded its electric vehicle battery supply partnership with Freudenberg Battery Power Systems, LLC, marking a significant shift in the South Korean manufacturer’s business portfolio. The mutual termination decision came after Freudenberg—headquartered in Freudenberg am Main—made the strategic choice to withdraw from the battery sector entirely.

Contract Scale and Timeline Details

The dissolved contract represented a substantial commitment for LG Energy Solution, carrying an original valuation of approximately KRW 3.92 trillion. The agreement had been active since April 1, 2024, with an expected duration extending through December 31, 2031—a comprehensive seven-year framework. Given the contract’s magnitude relative to the company’s overall revenue streams, its conclusion carries noteworthy implications for LG Energy Solution’s revenue projections and market positioning.

Circumstances Behind the Termination

Rather than stemming from performance disputes or contractual violations, the contract’s end resulted from Freudenberg Battery Power Systems’ deliberate exit from the battery manufacturing and supply business. The mutual agreement reflects both parties’ recognition of the changing strategic priorities, with Freudenberg choosing to reallocate resources away from the energy storage sector.

Market Implications

The termination underscores the dynamic nature of the global EV battery supply chain, where major suppliers periodically reassess their competitive positioning. For LG Energy Solution, the loss of this revenue stream necessitates strategic recalibration, though the company maintains diverse customer relationships across the automotive sector. The shift highlights how rapidly battery market dynamics can reshape supplier relationships and long-term commercial arrangements.