Tesla Supplier Slashes Battery Contract After Cybertruck Delays – Yahoo Finance
This article first appeared on GuruFocus.
A supplier to Tesla (NASDAQ:TSLA) has seen a major reassessment of a long-term battery materials agreement, underscoring how shifts in vehicle programs and end-market demand could feed back into the EV supply chain. L&F disclosed that a 3.83 trillion won supply contract announced in February 2023 has been revised down to 9.73 million won, citing a change in supply quantity. The reduction, amounting to roughly 99%, reflects how initial volume expectations have been reset as market and production assumptions evolved.
The high-nickel cathode material covered by the contract was scheduled for delivery from January 2024 through this month and was intended for Cybertruck batteries, according to a person familiar with the matter. Actual shipments were limited as the Cybertruck’s development was repeatedly postponed, while some consumers possibly opted for other Tesla models such as the Model 3 sedan and Model Y sport utility vehicle. The person added that broader policy and economic factors, including the elimination of Inflation Reduction Act subsidies, also weighed on the final supply outcome.
L&F said the contract revision was unavoidable as schedules were adjusted in line with changes in the global electric-vehicle market and battery supply conditions, while stressing that there have been no changes to shipments of its flagship high-nickel product to other customers. The company added that supplies to major Korean cell manufacturers continue to proceed smoothly. Following the disclosure, L&F shares dropped more than 6% after the close of regular trading in Seoul, though the stock remains up 16% this year, trailing the 76% gain in the Kospi Index.
