"South Korea's L&F Co. disclosed Monday that its 3.83 trillion won ($2.67 billion) supply contract with Tesla, first announced in February 2023, had been slashed to just 9.73 million won. In a filing, L&F said the reason for the 99% reduction was a change in supply quantity. The high-nickel cathode material that L&F was contracted to supply from January 2024 through this month was meant to be used in Cybertruck batteries, said the person, who asked not to be identified discussing sensitive business transactions."
"Scant material was provided as the vehicle's development was repeatedly postponed and consumers opted for other vehicles, including Tesla's Model 3 sedan and Model Y sport utility vehicle, the person said. The supply contract was also affected by broader policy and economic issues, including the elimination of Inflation Reduction Act subsidies, the person added. Tesla representatives didn't immediately respond to an emailed request for comment."
"L&F said in a statement that the revision was inevitable as schedules were adjusted in line with changes in the global electric vehicle market and battery supply conditions. There have been no changes to shipments or customer supply of the company's flagship high-nickel product, L&F said, adding that shipments to major Korean cell manufacturers are proceeding smoothly. Shares of L&F, which also supplies battery makers including LG Energy Solution Ltd., dropped more than 6% after the close of regular trading in Seoul."
L&F's 3.83 trillion won supply contract with Tesla was cut to 9.73 million won after a 99% reduction in supply quantity. The high-nickel cathode material was intended for Cybertruck batteries. Deliveries were minimal as Cybertruck development faced repeated postponements and customers chose other models such as the Model 3 and Model Y. The contract reduction was also influenced by broader policy and economic factors, including the elimination of Inflation Reduction Act subsidies. L&F said schedule adjustments aligned with shifts in the global electric-vehicle market and battery supply conditions were inevitable. Shipments to major Korean cell makers continue, and the company's shares fell over 6% in Seoul trading.
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