Tesla’s plans for its Cybertruck have hit a snag as South Korean battery supplier L&F Co slashed its 4680 battery deal from $2.9 billion to just $7,386, a 99% reduction. This setback comes as Tesla struggles to ramp up production and faces lackluster demand for the Cybertruck, with sales far below expectations.

The deal was intended to provide high-nickel cathode materials for Tesla’s 4680 cells, crucial for cost reduction and cheaper EVs. However, as demand slowed and production challenges arose, Tesla no longer requires as much cathode material from L&F. This development has raised concerns about Tesla’s battery supply chain and production capabilities.

Due to the reduced demand for the Cybertruck, Tesla discontinued its lowest-priced variant and faced criticism for battery-related issues in the Model Y. Despite these challenges, Tesla reported solid third-quarter financial results, with revenues of $28.1 billion and deliveries exceeding expectations. The company’s stock currently holds a Zacks Rank #3 (Hold).

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Read more at Nasdaq: Tesla’s Cybertuck Faces Major Roadblock as 4680 Battery Deal Slashed