The fallout continues from L&F’s corrected disclosure revising a 3.83 trillion won cathode materials supply contract with Tesla to 9.73 million won.

LG Energy Solution had earlier said it would terminate a large-scale contract, adding to growing concern that the potential of South Korea’s battery industry is deteriorating.

On Dec. 29 last year, L&F disclosed that it was cutting the value of a high-nickel cathode materials supply contract signed with Tesla in February 2023 to 9.73 million won from 3.83 trillion won. It had been a large contract to supply cathode materials for 4680 batteries for Cybertrucks to North America and other regions for two years from January 2024 to December 2025. A company official explained that the contract change occurred as schedules were adjusted amid changes in the global EV market and the battery supply environment.

L&F shares plunged about 26 percent to 95,200 won on Dec. 30, immediately after the corrected disclosure. The stock closed at 95,200 won that day, down 10.9 percent from the previous session, and traded at 94,300 won on Jan. 2. It traded at 96,300 won as of Jan. 5.

Ahead of the contract-change disclosure, L&F disposed of 1 million treasury shares on Dec. 3.

At the time, the company highlighted "record shipments" and "preparing for a quantum jump," but criticism has emerged in some quarters about the appropriateness of the disclosure and selling timing after the key contract reduction became known 26 days later.

At the time of the treasury share disposal, L&F presented a positive outlook as the background. It said the goal was to secure working capital for raw material purchases due to a surge in shipments of its NCMA95 product, respond to LFP demand, and preemptively secure funds for facility upgrades.

It stressed that the third quarter of 2025 was a record high for quarterly shipments, and that high-nickel products alone achieved the highest shipments in the company’s history. It also said it had completed securing a foundation to actively respond to ESS and EV demand through preemptive 대응 to steadily increasing volumes.

But contrary to the rosy outlook, the key contract was effectively scrapped. The "quantum jump preparation" mentioned in the treasury share disposal disclosure and the plan for "outstanding growth through innovation" from 2026 are now facing inevitable disruption due to the loss of the Tesla contract.

L&F’s issuance of 300 billion won worth of bonds with warrants in September last year drew more than 10 trillion won in funds and recorded a highest-ever subscription ratio of about 51.89 to 1. Investors invested based on positive assessments of leading technology in high-nickel and its LFP business, and criticism suggests they would not have expected the key Tesla supply deal to fall through.

In early December, 5 L&F executives also sold 일부 shares. Lee Byeonghee, the CEO, disposed of 8,125 shares on the 5th at 128,631 won, and Jang Seonggyun, the CEO, disposed of 2,000 shares at 127,675 won. On the 8th, Vice President Jeong Seongyeop sold 2,000 shares at 130,000 won. The total shares sold by executives were 15,649, and at an average selling price of 128,500 won, the amount is about 2.01 billion won.

An industry official said, "The time gap between the positive outlook disclosed at the time of the treasury share disposal and the contract cancellation disclosed in less than a month is too short." The official added, "It is difficult for a supply contract worth trillions of won between a global automaker and a parts supplier to be changed overnight, so it is highly likely it was discussed for a considerable period."