After repeated delays of the Cybertruck, Tesla slashed high-nickel battery material orders, with South Korea's L&F supply contract shrinking by 99%.

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The continued delays in the Tesla Cybertruck project have already impacted its supply chain. On Monday, Korean battery materials supplier L&F Co. disclosed that the 3.83 trillion won supply contract it signed with Tesla in February 2023 has been sharply reduced to 9.73 million won, a 99% decrease, due to changes in supply volume.

According to Bloomberg on December 29, citing informed sources, this batch of high-nickel cathode materials was originally intended for Cybertruck batteries, with the delivery period from January 2024 to this month. However, due to repeated delays in the development of this model, coupled with consumers turning to other vehicles such as the Model 3 sedan and Model Y SUV, L&F’s actual supply volume has been very limited.

Year-to-date, L&F’s stock price has risen more than 36%, lagging behind the 76% increase in South Korea’s KOSPI index.

Dual Pressure from Policy and Market

The company originally planned to supply high-nickel cathode materials to Tesla over the next two years; these materials are key components for improving battery energy density. L&F stated in a statement that due to changes in the global electric vehicle market and battery supply situation, production plans must be adjusted, making this contract revision unavoidable.

The company emphasized that shipments and client supply of its flagship high-nickel product have not changed, and deliveries to major Korean battery manufacturers, including LG Energy Solution, are progressing smoothly. According to informed sources, the contract adjustment was influenced not only by product development progress but also by broader policy and macroeconomic factors, including changes in subsidy policies under the Inflation Reduction Act.

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