**Tesla Supplier Cuts Battery Material Supply by 99% Amid Cybertruck Delays**
A supplier for Tesla Inc. has drastically reduced its battery material supply, fulfilling only a small fraction of the order placed nearly three years ago. This reduction is partly attributed to ongoing issues with the Cybertruck, as reported by a source familiar with the situation.
South Korea’s L&F Co. announced on Monday that its supply contract with Tesla, valued at 3.83 trillion won and initially revealed in February 2023, has been cut down to a mere 9.73 million won. The company stated that the 99% decrease was due to a change in the quantity of materials supplied.
The high-nickel cathode material that L&F was set to deliver from January 2024 through this month was intended for use in Cybertruck batteries. However, the development of the vehicle has faced multiple delays, leading consumers to choose other Tesla models, such as the Model 3 sedan and Model Y SUV, according to the source, who requested anonymity due to the sensitive nature of the business dealings.
Additionally, the supply contract has been impacted by broader economic and policy challenges, including the removal of subsidies under the Inflation Reduction Act. Tesla representatives have not responded to requests for comment regarding this matter.
In a statement, L&F acknowledged that the revision of the contract was unavoidable due to adjustments in the global electric vehicle market and battery supply conditions. The company emphasized that there have been no changes to the shipments or supply of its flagship high-nickel product, and that deliveries to major Korean cell manufacturers are continuing without issues.
Following the announcement, shares of L&F fell by 11% in Seoul on Tuesday. Despite this decline, the stock has seen an overall increase of approximately 16% this year, although it lags behind the 76% rise in the benchmark Kospi Index.
**FAQ**
**What caused the significant reduction in L&F’s supply to Tesla?**
The reduction was primarily due to delays in the Cybertruck’s development and shifts in consumer preferences towards other Tesla models, along with broader economic factors affecting the electric vehicle market.
