Order Value Cut by 99% - Tesla's Cybertruck issues hurt a South Korean supplier

Due in part to problems with the Cybertruck, a supplier to Tesla Inc. ultimately sent a very small portion of the battery material the automaker purchased about three years ago, according to a person familiar with the situation.

L&F Co. of South Korea revealed on Monday that the 3.83 trillion won ($2.67 billion) supply deal it had originally announced in February 2023 with Tesla had been reduced to just 9.73 million won. L&F stated in a filing that a change in supplier quantity was the cause of the 99% decline.

The insider, who wished to remain anonymous when discussing private business matters, stated that the high-nickel cathode material that L&F was hired to supply from January 2024 through this month was intended to be utilised in Cybertruck batteries.

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As the car's construction was frequently delayed and buyers chose other models, such as Tesla's Model 3 sedan and Model Y sport utility vehicle, there was little material available, according to the person.

The individual stated that other general policy and economic concerns, such as the removal of Inflation Reduction Act subsidies, also had an impact on the supply contract. An email requesting comment was not answered by Tesla personnel.

According to a statement from L&F, the alteration was unavoidable since timetables were modified to reflect shifts in the global market for electric vehicles and the state of the battery supply.

“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 major Korean cell manufacturers are proceeding smoothly.

L&F's stock fell 11% in Seoul on Tuesday. L&F also supplies battery manufacturers, such as LG Energy Solution Ltd. This year, the stock has increased by about 16%, falling short of the benchmark Kospi Index's 76% increase.