Tesla Cybertruck Flop Proves Costly for South Korean Supplier

A supplier to Tesla Inc. has provided a small portion of the battery material the automaker ordered almost three years ago, in part because of problems with the Cybertruck, according to a person familiar with the matter.

South Korean L&F Co. It announced on Monday that the 3.83 trillion won supply contract with Tesla, first announced in February 2023, had been reduced to just 9.73 million won. In its application, L&F said that the reason for the 99% reduction was the change in supply quantity.

The person, who did not want to be identified due to sensitive commercial transactions, said that the high-nickel cathode material that L&F agreed to supply from January 2024 until this month should be used in Cybertruck batteries. The person said insufficient supplies were made available because development of the vehicle was repeatedly delayed and consumers opted for other vehicles, including Tesla’s Model 3 sedan and Model Y sport utility vehicle.

The supply contract was also affected by broader policy and economic issues, including the removal of Inflation Reduction Act subsidies, the person added. Tesla representatives did not respond to an emailed request for comment.

L&F said in a statement that the revision was inevitable as the schedules were adjusted to changes in the global electric vehicle market and changes in battery supply conditions.

“There have been no changes to shipments or customer supply of the company’s flagship high-nickel product,” L&F said, adding that shipments to Korea’s leading cell manufacturers are proceeding smoothly.

LG Energy Solution Ltd. Shares of L&F, which also supplies battery makers including, fell 11% in Seoul on Tuesday. The stock is up nearly 16% this year, trailing a 76% rise in the benchmark Kospi Index.

With the help of Shinhye Kang.

This article was generated from an automated news agency feed without modifications to the text.