LGES Secures Major Order for Cylindrical Cells – Possibly From BMW

Why It Matters

Securing a multi‑year, multi‑billion‑dollar order from a premium OEM strengthens LGES’s position in the high‑growth cylindrical‑cell market and deepens its U.S. supply chain foothold, challenging rivals like Tesla and CATL.

Key Takeaways

• LGES secures >100 GWh of 46‑mm cylindrical cell orders, likely for BMW
• Contract worth ~ $7.7 bn, spanning ten years
• Backlog now tops 440 GWh, boosting LGES revenue outlook
• Arizona plant will produce 4695 and 46120 formats for U.S. deliveries
• BMW’s shift to domestic cylindrical cells reduces reliance on overseas suppliers

Pulse Analysis

LG Energy Solution (LGES) is accelerating its shift toward high‑energy‑density cylindrical cells, a segment once dominated by pouch formats. The 46‑mm series—spanning 4680, 4695, and 46120 dimensions—offers a blend of power and packaging efficiency that automakers are increasingly adopting for next‑generation EVs. By locking in more than 100 GWh of orders, LGES not only expands its backlog to 440 GWh but also signals confidence in scaling production capacity across its Korean and U.S. facilities. This momentum comes as the company reports modest revenue growth despite an operating loss, underscoring the strategic bet on cylindrical technology.

For BMW, the likely contract aligns with its Neue Klasse platform, which specifies 46‑mm cylindrical cells for models such as the iX3, i3, i7, and the upcoming iX5. Sourcing these cells from LGES’s Arizona plant offers logistical advantages, cutting transit times and tariffs compared with imports from Asia. The partnership also diversifies BMW’s battery supply chain after a halted AESC project, providing a domestic, stable source that can support the automaker’s expanding U.S. production at Spartanburg. The ten‑year term gives both parties a predictable framework to co‑develop cell chemistry and thermal management solutions tailored to BMW’s performance targets.

Industry‑wide, the deal intensifies competition among battery makers vying for OEM contracts in the lucrative cylindrical segment. While Tesla continues to champion its 4680 cells, LGES’s ability to produce larger 4695 and 46120 formats positions it as a versatile supplier for a broader vehicle range. Rivian, Chery, and potentially Mercedes‑Benz already have agreements for similar cells, suggesting a broader shift toward standardized 46‑mm formats. As U.S. EV demand accelerates, domestic cell production will become a critical differentiator, and LGES’s Arizona expansion could set a benchmark for future supply‑chain localization strategies.