Mercedes-Benz has signed long-term battery cell supply agreements with LG Energy Solution valued at approximately $11 billion. The European automaker and the Korea-based battery giant plan to produce high-nickel NMC and low-cost chemistries for both European and U.S. EV programs. Deliveries are expected to ramp through the late 2020s as Mercedes pursues its electric growth roadmap.
This deal emphasizes the capital flows into cell manufacturing, yet it also points to the hidden thermal infrastructure requirements. Battery lines demand pre-dry ovens, electrode bake stations, formation ovens (charging cycles), and aging ovens. The sheer volume of cells in Mercedes’ line means thermal steps must scale reliably to support throughput without bottlenecks.
For U.S. battery cell plants supporting this supply partner, the contract may accelerate build-outs of these thermal process rooms. That gives material vendors and oven makers early visibility into capacity planning, uniformity requirements, and throughput targets tied to cell formats, cycle times, and aging protocols.
Investors and suppliers have taken notice. LG’s stock saw a modest bump upon the announcement, and analysts flagged the Mercedes deal as a signal that Tier-1 automakers are doubling commitments to cell integration and internal supply security. The long duration of the agreement provides predictability, which in turn helps procurement teams lock thermal equipment orders months or even years in advance.
Looking forward, the decisions the parties make around electrode formulations, electrode stack design, and cell chemistry speed limits will determine oven thermal budgets (dwelling times, ramp rates, cooling steps). These variables flow directly into how an oven house designs heating zones, uniformity gradients, and throughput paths.
At the same time, thermal OEMs should watch how Mercedes and LG structure contract terms, yield guarantees, and penalty clauses tied to process stability. Because when one manufacturer scales a million-cell line, small deviations in oven performance can cost millions in scrap or battery failures.
The next chapter may revolve around how this deal ripples into adjacent supplier networks. Take note of who wins orders for thermal systems, who upgrades capacity, and how quickly U.S. domestic oven-makers can compete. Readers should keep an eye on supplier awards, site locations, and thermal automation strategies emerging from this deal.
Article & image source: LG Energy Solutions
