Seoul: LG Energy Solution Ltd., South Korea: South Korea's leading battery maker, LG Energy Solution Ltd. (LGES), has announced a major overseas contract, securing a 5.9 trillion-won (US$4.26 billion) deal to supply lithium-ion phosphate (LFP) batteries to an undisclosed client.

According to Yonhap News Agency, LGES revealed in a regulatory filing that the agreement entails supplying LFP batteries over a three-year period, from August 1, 2027, to July 31, 2030. The contract's value represents 23.2 percent of LGES's annual sales, which stood at 25.6 trillion won last year. The filing also noted that the contract's terms and value might be adjusted pending further discussions with the client.

Market analysts speculate that the mysterious client could be Tesla Inc. The U.S. electric vehicle giant had indicated during its first-quarter earnings call that it was in search of an LFP battery supplier outside China, mainly due to U.S. import tariffs. LGES's existing operations in the United States include battery cell plants in Ohio, Tennessee, and Michigan, with the Michigan facility currently producing LFP batteries for energy storage systems.

LFP batteries are regarded for their safety and cost-effectiveness, though they generally have a lower energy density and shorter driving range compared to lithium-ion and nickel cobalt manganese batteries, which are more commonly used by Korean battery manufacturers.