South Korean battery material manufacturer L&F has revised the value of its 2023 supply contract with Tesla from around 2.9 billion to just 7,386 US dollars. The drastic change was announced by the company without any specific reasoning being provided. The agreement stipulated that L&F would supply Tesla and its affiliates with high-nickel cathode materials from January 2024 to the end of 2025.
Production difficulties with Tesla cells
Industry analysts attribute this reduction to production difficulties with Teslaʼs 4680 battery cells, as well as an overall slowdown in electric vehicle demand. Tesla had originally announced plans to adopt the 4680 cell on a large scale as part of a new battery architecture. However, the cell technology is currently only used in the Cybertruck, which, according to market observers, has limited sales. The company is also facing challenges in scaling up an electrode drying process intended for producing the 4680 cells.
