In a regulatory filing Friday, the South Korean battery maker said it mutually agreed with FBPS to end the contract after the U.S.-based company decided to withdraw from the battery business. The deal, signed in April last year, was originally valued at about $2.8 billion and was scheduled to run through the end of 2031.
LG Energy Solution said about $110 million worth of supplies had already been delivered under the contract, and that the final termination amount may change depending on due diligence results and exchange-rate fluctuations.
FBPS, a unit of Germany’s Freudenberg Group, operates a battery-pack assembly plant in Midland, Michigan, and had planned to source battery modules from LG Energy Solution for electric buses and commercial trucks in North America.
The company has since been reported to be reviewing a broader exit from the battery sector.
The latest cancellation follows LG Energy Solution’s disclosure earlier this month that it had terminated a separate 9.6 trillion won battery supply contract with Ford Motor Co., after the U.S. automaker revised its electric-vehicle strategy amid weaker-than-expected demand and shifting policy conditions.
Taken together, the two cancellations bring the total value of contracts terminated by LG Energy Solution this month to 13.5 trillion won — equivalent to more than half of the company’s annual revenue of 25.6 trillion won recorded in 2024.
Despite the scale of the cancellations, LG Energy Solution said the financial impact would be limited.
“We have not made investments in specialized production facilities or incurred research and development expenses tied to these contracts, so there are no additional costs arising from the terminations,” the company said in its filing. It added that the move would allow the company to “streamline relationships with uncertain customers and secure a more stable source of demand.”
Regarding the Ford contract, LG Energy Solution said the termination followed formal notice from the automaker, which has been reassessing its EV production plans amid slower demand growth, rising costs and changes in U.S. subsidy policies. Ford has recently canceled or delayed several EV models and shifted its strategy toward hybrids and internal-combustion vehicles.
The battery maker said the disclosed termination amounts were calculated by applying battery prices at the time of contract signing to the originally agreed supply volumes, meaning the figures do not represent realized losses.
Industry analysts say the back-to-back cancellations highlight the deepening “EV demand chasm,” as automakers recalibrate investment plans following years of aggressive expansion, while battery suppliers face growing pressure to adjust capacity and customer portfolios.
LG Energy Solution said it will focus on strengthening its order book with more stable customers and maintaining financial flexibility amid uncertainty in the global electric-vehicle market.
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