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Tesla Supplier L&F Restates $2.9 Billion Contract to $7,386
Tesla Supplier L&F Restates $2.9 Billion Contract to $7,386
About this update from L & F Co., Ltd.
Tesla NASDAQ:TSLA once played a central role in elevating South Korean battery-materials producer L&F into the global EV supply-chain spotlight, after a 2023 order initially valued at $2.9 billion drove a sharp rally in the company's shares. That agreement, however, has now been materially revised, with L&F disclosing that the contract value was restated to just $7,386, representing a 99% reduction. The adjustment comes after L&F shares had already fallen more than 70% from their 2023 peak, and it coincides with a notable decline in the personal wealth of Chairman and Chief Executive Officer Hur Jae-hong and his family, whose listed holdings have dropped from more than $800 million at their high to roughly $134 million, according to the Bloomberg Billionaires Index.The original Tesla order was linked to cathodes intended for certain Cybertruck models, but volumes appear to have diminished as the vehicle faced repeated delays and demand proved softer than initially expected. The stock had already been trending lower amid a broader cooling in global EV demand and rising investor concerns over L&F's dependence on LG Energy Solution, which accounts for about 80% of total sales. Analysts at KB Securities said L&F had likely not been supplying Tesla with any cathodes since last year, noting that the contract had already been excluded from earnings forecasts, which suggests the disclosure's impact on future performance could be extremely limited. They added that L&F's indirect supply to Tesla via LG Energy Solution, supporting high-volume models such as the Model Y, appears to be progressing smoothly regardless of the latest filing.Even so, the inability to monetize the 2023 Tesla contract represents a setback for L&F's longer-term diversification strategy. A partnership signed in 2021 with US battery recycling company Redwood Materials, followed by the Tesla deal, had been viewed as a pathway to reduce reliance on LG Energy Solution to 50% by 2025, a target that now faces renewed scrutiny. Looking ahead, some analysts see potential recovery drivers emerging, with L&F scheduled to begin full-scale production for Rivian Automotive in 2026 and continuing to supply mid-nickel cathodes to SK On for Hyundai Motor EV batteries. While near-term investor sentiment could remain pressured, there is an increasing possibility that attention may return to the sector in 2026,...