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South Korean battery materials maker L&F Co. said on Monday that the value of its cathode material supply contract with U.S. electric vehicle maker Tesla has been reduced from 3.83 trillion won ($2.68 billion) to just 9.73 million won, effectively amounting to a contract termination.

In February 2023, L&F disclosed that it had secured a two-year contract to supply high-nickel cathode materials to Tesla from January 2024 through Dec. 31, 2025. The deal was valued at nearly four times L&F’s annual revenue at the time.


High-nickel cathode materials, with a nickel content exceeding 90 percent, offer higher energy density and are primarily used in high-performance electric vehicle batteries. L&F has advanced its technology by increasing nickel content to as high as 95 percent and currently supplies high-nickel cathodes to major Korean battery manufacturers, including LG Energy Solution and SK On.

L&F said the contract reduction was unavoidable as schedules were adjusted amid changes in the global electric vehicle market and battery supply environment. Industry sources attribute the cutback to delays in Tesla’s plans for in-house battery production. The remaining 9.73 million won reflects the cost of initial sample shipments, the company said.

“The shipment and supply of our flagship NCMA95 high-nickel products remain unchanged,” L&F said, adding that it will continue to strengthen technological competitiveness while responding flexibly to changes in customers’ business conditions and market demand to ensure stable medium- to long-term supply.

Following the disclosure, L&F shares plunged 9.1 percent from the previous session to 94,000 won as of 6:50 p.m. in after-hours trading on NEXTRADE.

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