LG Energy Solution breaks into Chinese EV market with battery deal for Chery

Deal marks first official EV battery supply to China by Korean company amid market dominated by CATL, BYD

Chery's Exeed Sterra ET all-electric luxury sport utility vehicle (Chery)

LG Energy Solution announced Monday that it has secured an agreement to supply 46-series cylindrical batteries to China’s Chery Automobile, marking the first time a Korean company will power Chinese electric vehicles.

Under the deal, LG Energy Solution will provide 8 gigawatt-hours of its new 46-series batteries — measuring 46 millimeters in diameter and between 80 and 120 millimeters in height — over the next six years, enough to power approximately 120,000 EVs. Mass production of the batteries is scheduled to begin in the second half of the year.

While the exact vehicle models have not been disclosed, industry sources say LG’s nickel, cobalt, and manganese battery cells are expected to be installed in Chery’s high-performance EV lineup.

As Korean battery makers have recently pivoted toward energy storage system batteries amid slowing global EV demand, the deal marks LG Energy Solution’s first official supply contract for electric vehicles this year.

“It is extremely challenging to break into the Chinese EV market, which is often described as a ‘fortress’ due to its protectionist stance toward foreign battery makers,” said an LG Energy Solution official. “Local battery manufacturers like CATL and BYD benefit from extensive government support and strong ties with Chinese automakers.”

According to the China Automotive Battery Innovation Alliance, domestic players dominate over 95 percent of China’s EV battery market as of May. CATL holds a 45.9 percent share, followed by BYD at 22.5 percent and CALB at 7.5 percent.

LG Energy Solution emphasized that while competitors like BYD and EVE use 46-series cylindrical batteries primarily in lightweight e-scooters, LG’s version offers broader applicability, including in electric vehicles produced by global automakers such as Mercedes-Benz and Rivian.

The company’s 46-series cells deliver at least six times higher energy capacity and five times greater output compared to 2170 cylindrical batteries (21mm x 70mm). Compared to lithium iron phosphate batteries favored by Chinese rivals, LG’s NCM-based batteries offer better thermal stability, faster charge/discharge cycles and longer driving range.

Additionally, the 46-series batteries lower production costs through simplified manufacturing processes. In April, Yuanta Securities projected that the new form factor could reduce the number of cells required in a battery pack, while dry electrode technology could cut costs by up to 50 percent.

As next-generation batteries — including all-solid-state, manganese-rich and sodium-ion technologies — still face commercialization hurdles, LG’s 46-series cells are seen as a more immediately viable alternative, according to the company.

“Our technological prowess, which delivers unique customer value, is the foundation for bridging the EV market gap and leading the next supercycle,” said the company official. “The supply contract with Chery Automobile is particularly meaningful as it opens the door to global expansion of the 46-series form factor and helps solidify our market leadership.”

Founded in 1997, Chery Automobile is a state-owned Chinese automaker with a diverse lineup that spans internal combustion engines, hybrids and EVs. Its global brands include Chery, Exeed, Omoda and Jaecoo. In 2023, the company reported over 2.4 million units in total sales and 1.1 million units in exports.