In a landmark move that could reshape the dynamics of the electric vehicle (EV) battery industry, LG Energy Solution (LGES) has entered into a significant partnership with Chery Auto, one of China’s state-owned automotive giants. On June 16, LGES announced a six-year agreement to supply 8 gigawatt-hours (GWh) of its cutting-edge 46-series cylindrical batteries, marking the first large-scale cylindrical battery supply deal between a South Korean battery manufacturer and a Chinese automaker.
This deal is seen as a major breakthrough given the traditionally protectionist nature of the Chinese EV market, where domestic players like CATL and BYD have long dominated and foreign battery suppliers have struggled to penetrate.
Deal Overview:
LGES will begin delivering the cylindrical batteries to Chery starting early next year, and the batteries will be integrated into Chery’s flagship EV models. While the exact financial terms were not disclosed, industry experts estimate the deal to be worth at least 1 trillion Korean won (approx. $720 million) based on the volume.
Moreover, both companies are reportedly exploring further collaboration to extend battery supply to other EV models across the Chery Auto Group, signaling the start of a potentially broader strategic partnership.
Why This Deal Matters:
The Chinese EV market is the largest in the world, but also one of the most challenging for foreign battery firms to access. Domestic preference, government subsidies, and localized supply chains have created significant entry barriers.
LGES’s ability to win this contract demonstrates not only the technological competitiveness of its cylindrical batteries, but also the strategic value these cells offer to automakers looking to differentiate themselves in an increasingly competitive and export-oriented EV market.
Technical Excellence: The 46-Series Cylindrical Battery
At the core of the agreement is LGES’s 46-series cylindrical battery, a next-generation cell design with a diameter of 46mm and a height ranging from 80 to 120mm. This cell format has been widely touted as a “game changer” for the battery industry due to its superior performance and manufacturing efficiency.
Compared to traditional 2170 cells, the 46-series boasts:
- 5x higher power output
- 6x greater energy capacity
- Simplified production processes leading to lower costs
- Enhanced thermal management and safety features
These attributes make the 46-series especially suitable for long-range EVs and high-performance applications, where both power and energy density are critical.
Strategic Differentiator: NCM vs. LFP
Notably, the 46-series batteries supplied to Chery will be based on NCM chemistry—nickel, cobalt, and manganese—rather than lithium iron phosphate (LFP), which is the dominant chemistry used by most Chinese battery manufacturers.
This choice reflects a strategic shift for Chery Auto, aligning with global trends toward higher energy density batteries that support longer driving ranges and better performance. NCM batteries also typically command higher profit margins, positioning both companies to capture premium segments of the EV market.
LGES’s Global 46-Series Expansion
This deal adds to a growing list of global automakers that have selected LGES as their partner for 46-series batteries:
- In 2023, LGES signed a 50GWh supply agreement with Mercedes-Benz Group
- A 67GWh deal was also secured with Rivian, an American electric pickup and SUV maker
- In late 2025, LGES plans to begin mass production of 4680 batteries for Tesla, further validating the scalability and performance of the 46-series design
With each new contract, LGES is solidifying its position as a global leader in cylindrical battery technologies and expanding its international footprint in the high-end EV sector.
Market Implications
This partnership could serve as a bellwether for changing dynamics in the global battery supply chain. If successful, it may encourage other Chinese automakers to look beyond domestic suppliers, especially for premium or export-focused models.
It also reinforces LGES’s ability to differentiate through innovation, which CEO Kim Dong-myung highlighted in his official statement:
“Only by delivering unmatched customer value through superior technology can we overcome the chasm in the EV market and lead the forthcoming supercycle. This contract with Chery Auto will serve as a launchpad for expanding our 46-series platform globally and seizing market leadership.”
Conclusion: A Step Toward Battery Globalization
As the EV revolution continues to unfold, battery technology will remain at the heart of competition. LG Energy Solution’s entry into the once-impenetrable Chinese EV supply chain marks a pivotal moment—not only for the company itself but also for the globalization of next-generation battery technologies.
The Chery Auto deal is a validation of LGES’s strategy to invest in form factor innovation, chemistry optimization, and manufacturing scalability. With NCM-based 46-series cells now gaining traction across continents, LGES is well-positioned to shape the future of EV performance and redefine the competitive landscape of the battery industry.
As the world moves toward electrification, technology leadership, not just production scale, will be the key differentiator—and LGES appears to be accelerating in the right direction.
