Seoul: South Korean battery maker LG Energy Solution Ltd. announced that it has mutually agreed with a U.S. company to terminate a supply contract originally signed in 2024.

According to Yonhap News Agency, LG Energy Solution revealed in a regulatory filing that the supply deal worth 3.9 trillion won (US$2.69 billion) with Freudenberg Battery Power System (FBPS) LLC, a U.S.-based battery pack producer, has been canceled. The termination occurred as FBPS decided to exit the battery industry.

The agreement, initially signed in April, was valued at $2.7 billion, and LG Energy Solution had already executed $110 million of the deal. This development follows a recent announcement by LG Energy Solution regarding the cancellation of a 9.6 trillion-won battery supply order from Ford Motor Co. that was signed last year.

With the latest termination, the total value of contracts canceled this month for LG Energy Solution has reached 13.5 trillion won, representing approximately half of the company's annual sales of 25.6 trillion won posted in 2024. Despite the significant contract cancellations, LG Energy Solution maintains that the impact on its financial health will be limited.

The company stated, "We have not made an investment for building specialized production facilities nor expenditures for research and development projects. Thus, there are no additional costs incurred due to the termination." LG Energy Solution also emphasized its intent to use this opportunity to streamline relationships with uncertain customers and secure a more stable source of demand.