South Korea’s L&F drastically reduced its battery materials supply agreement with Tesla to just $7,386 from the original $2.9 billion projection. The agreement was for high-nickel cathode materials to be used in Tesla’s 4680 battery cells. Analysts believe the cut reflects Tesla’s production challenges and lower EV demand.

The reduction in the supply agreement comes amidst challenges in South Korea’s battery sector, with automakers canceling or reducing orders due to production yield issues and slowing EV growth. LG Energy Solution and SK On are expected to suffer revenue losses, while Ford is terminating supply contracts and scrapping EV models.

Tesla’s stock closed at $459.64, down 3.27%, with after-hours trading at $458.34 on the NasdaqGS. The broader pullback in EV investments by automakers like Ford, coupled with policy uncertainty and weakening demand, is reshaping the industry landscape.

Read more at Nasdaq: L&F Cuts Tesla Battery Materials Contract Value From $2.9 Bln To Just $7,386: Reuters