LG Energy Solution cancels $2.7B battery deal with German firm amid EV market shift, adopting asset-light strategy.

LG Energy Solution has canceled a $2.7 billion battery supply contract with Freudenberg Battery Power Systems after the German company decided to exit the battery business, joining Ford’s recent cancellation of a major deal. The combined loss of $9.3 billion in expected revenue—over half of LGES’s 2024 revenue—marks a major setback amid weakening EV demand and shifting policies. Despite the cancellations, LGES reported no immediate financial loss, as it had not made significant investments for the projects. In response, the company is adopting an “asset-light” strategy, selling its Ohio factory to Honda for $2.86 billion to improve flexibility and stabilize its order book amid a market shift toward hybrids.