Yuanta Securities Korea said on the 30th that while a short-term hit to investor sentiment is inevitable after L&F's revision disclosure of its supply contract, interest in the secondary battery sector could rise again in 2026, centered on ESS for artificial intelligence (AI) data centers, following a string of negative disclosures related to electric vehicles (EVs).
Earlier, on the 28th, L&F announced a revision disclosure to the high-nickel cathode material supply contract signed with Tesla on Feb. 28, 2023. With this filing, the direct supply contract for cathode materials for Tesla's Cybertruck 4680 batteries, which had been valued at 3.8347 trillion won, was terminated, leaving only about 9.73 million won in revenue from sample volumes generated to date.
Researcher Lee Anna at Yuanta Securities Korea pointed to changes in Tesla's supply chain and production strategy as the reason for the contract termination. Lee said, "As EV demand in North America has slowed faster than expected, Tesla is reassessing the mass-production pace and scale of the 4680 battery," adding, "Rather than maintaining the existing contract amid adjustments to the structure or timeline of planned 4680 battery projects, Tesla appears to be terminating for now and shifting discussions to new project units tailored to the changed environment."
However, the analysis is that Tesla's long-term strategy itself has not changed. The researcher said, "The transition from 2170 to 4680 (dry electrode process) is Tesla's long-term roadmap to cut EV costs," adding, "The schedule is merely delayed due to technical maturity and demand issues, and the strategy to shift to the 4680 form factor and introduce high-nickel, single-crystal cathode materials has not been revised."
Looking ahead, the visibility of L&F's earnings hinges on volumes for Rivian and its supply relationship with LG Energy Solution, according to the assessment. The researcher added, "The volumes ordered for Rivian in Mar. 2025 are slated for full-scale production and shipment starting in 2026," and "Discussions related to supply through LG Energy Solution and new form factors are ongoing."