LG Energy Solution to Supply Batteries for Ford's European Commercial Vans

Seoul, South Korea—LG Energy Solution (373220. KS) announced on Tuesday that it had signed agreements to supply battery modules for Ford Motor Company's (F.NYSE) electric commercial vans in Europe. 

The contracts cover 109 GWh of batteries, with supply beginning in 2026 for four to six years.

LG Energy Solution will produce the batteries at its Wrocław plant in Poland.

The company and Ford have also agreed to shift battery production for the current Ford Mustang Mach-E to LG Energy Solution's Michigan plant by 2025, moving from Poland to take advantage of U.S. Inflation Reduction Act tax credits.

LG Energy Solution CEO David Kim stated that the agreements demonstrate the company's expertise in powering commercial vehicles with batteries designed for extreme conditions. 

South Korea's battery maker aims to strengthen its position in the European market through local production capacity and advanced battery technologies.

The deal comes as automakers worldwide are increasing their focus on electric vehicle production to meet stringent emissions regulations and growing consumer demand for cleaner transportation options. 

According to LMC Automotive, electric commercial vehicles are forecast to make up about 50% of automobiles transporting goods or paying passengers in Europe by 2030.

For Ford, securing a stable battery supply is crucial to its European electrification strategy, where regulations push for the rapid adoption of zero-emission vehicles. 

LG Energy Solution, meanwhile, stands to benefit from increased market share in the growing European electric commercial vehicle sector.

While the financial terms of the agreements were not officially disclosed, industry sources in Seoul estimated the deal's value at about KRW 13 trillion ($9.5 billion) based on current cell prices.