Tesla supplier sees 99% cut in battery material contract amid Cybertruck woes

Investing.com -- South Korean battery material supplier L&F Co’s contract with Tesla Inc has been reduced by 99%, from 3.83 trillion won ($2.67 billion) to just 9.73 million won, the company disclosed on Monday.

The dramatic reduction in the supply agreement, which was originally announced in February 2023, was attributed to a "change in supply quantity," according to L&F’s regulatory filing.

The contract involved high-nickel cathode material that L&F was scheduled to supply from January 2024 through December 2025. This material was intended for use in Cybertruck batteries, according to a Bloomberg report on Monday that cited a person familiar with the matter.

Only minimal material was delivered as Cybertruck development faced repeated delays. Consumers instead opted for other Tesla vehicles, including the Model 3 sedan and Model Y sport utility vehicle.

The supply agreement was also impacted by broader policy and economic factors, including the elimination of Inflation Reduction Act subsidies, the report added.

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