Mercedes-Benz aims to enhance its tarnished corporate image — resulting from the disastrous fire involving its EQE electric vehicle (EV) — by securing a major battery contract with Korea’s largest battery manufacturer, LG Energy Solution.
Korea is a highly strategic market for Mercedes-Benz Korea, driven by local customers’ strong loyalty to luxury vehicles, as evidenced by the sales data of the carmaker’s flagship premium cars.
According to the automaker, accumulated sales of its top-of-the-line S-Class sedans in Korea surpassed 100,000 by the end of last year. Korea ranks as the world’s third-largest market for the company in terms of luxury lineup sales.
However, as the global auto industry undergoes a transition toward the mass adoption of EVs, the German automaker urgently needs to maintain its winning streak with its EV lineup.
However, this goal appears challenging for the automaker in the near future, as its EQE sedan — equipped with a battery from the lesser-known Chinese firm Farasis Energy — caught fire at an apartment complex in Incheon, instilling a sense of EV-phobia in the region. The incident resulted in the destruction of several vehicles parked nearby.
As negative public sentiment toward unpopular Chinese battery firms continues to persist, the recent report that LG Energy Solution secured a battery order from an affiliate of Mercedes-Benz in North America is seen as a significant boost for the German automaker in terms of improving its tarnished brand image, according to industry officials.
“Most consumers still feel a sense of unease about EVs with batteries from non-Korean companies, after the catastrophic EQE fire in August,” an auto industry official said.
“While it remains uncertain when the upcoming Mercedes-Benz EV with LG Energy Solution batteries will be imported to Korea, the report is expected to help alleviate the growing distrust toward the automaker’s EVs, as local customers increasingly prefer EVs with Korean batteries following the recent fire incident,” the official added.
Currently, no EVs from Mercedes-Benz Korea are equipped with batteries from LG Energy Solution. LG supplied batteries for the EQC EV until 2021, but sales of that vehicle have since been discontinued.
Under the latest contract, LG will supply a total of 50 gigawatt-hours of EV batteries to the Mercedes-Benz subsidiary starting in 2028 for a duration of 10 years. However, it remains uncertain whether these upcoming EVs will be available for sale in Korea.
For now, Mercedes-Benz EVs sold here are produced and imported from the U.S. and Europe.
According to data from the Korea Automobile Importers & Distributors Association (KAIDA), Mercedes-Benz EV sales suffered a steep decline between January and September. The carmaker’s combined EV sales figure during the period plunged by around 47 percent from a year earlier, hit hard by the explosion of one of its EV models.
