<div id="readability-page-1"><div>By Hyunjoo Jin and Heekyong YangSEOUL, Dec 29 (Reuters) - South Korean battery material maker L&amp;F said on Monday the value of its 2023 supply deal with Tesla has shrunk to $7,386 from ​an earlier projection of $2.9 billion, without providing reasons for the sharp cut.L&amp;F said in 2023 it ‌had signed a deal to supply high nickel cathode materials to Tesla and its affiliates from January 2024 through December 2025. Sources and ‌analysts said L&amp;F had planned to supply the key materials for Tesla's in-house batteries known as 4680 cells.Tesla CEO Elon Musk unveiled a plan in 2020 to mass-produce the 4680, a less expensive battery that he said would help it make a small, compelling $25,000 electric car that was fully autonomous within about three years from then.However, as EV ⁠demand slowed and Tesla struggled to ‌ramp up production and development of the 4680 cells, the company ultimately did not need as much cathode material from L&amp;F as initially anticipated, analysts said.Neither Tesla nor L&amp;F ‍immediately responded to Reuters' requests for comments.Tesla currently uses the 4680 batteries in its slow-selling Cybertruck EVs, which have proved a major disappointment despite Musk’s prediction of hundreds of thousands of annual sales.Musk has also admitted it will be a challenge ​to scale up a new battery process called dry electrode used to make the cells.ORDER CANCELLATIONCho Hyun-ryul, ‌a senior analyst at Samsung Securities, said issues with production yields of Tesla's 4680 batteries and a slowdown in EV demand growth could have affected the reduction in orders from L&amp;F. &#34;There (is) anxiety about the battery sector overall,&#34; he added.Some battery suppliers have reported order cancellations and ended or scaled down joint ventures with General Motors and Ford Motor following the end of U.S. federal subsidies for electric vehicles in September.In recent weeks, South Korea's ⁠battery industry has come under mounting pressure as automakers scale back ​EV plans amid policy uncertainty and weakening demand.LG Energy Solution is ​set to lose about 13.5 trillion won ($9.41 billion) in expected revenue due to termination of battery supply deals from Ford and Freudenberg Battery Power Systems, more than half of its ‍25.62 trillion won in revenue ⁠last year.Another South Korean battery maker, SK On, said this month it has decided to end its joint venture with Ford for their battery factories in the U.S.Ford said it would take a $19.5 ⁠billion writedown and scrap several electric vehicle models, a dramatic example of the auto industry's retreat from battery-powered models in response to ‌the Trump administration's policies and weakening EV demand.($1 = 1,435.0100 won)(Reporting by Hyunjoo Jin and Heekyong Yang; ‌Editing by Christopher Cushing, Tom Hogue and Jan Harvey)</div></div>

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South Korea's L&F has significantly reduced the value of its supply deal with Tesla from $2.9 billion to $7,386 for high nickel cathode materials, effective from January 2024 to December 2025. This cut is attributed to Tesla's decreased need for materials due to slower EV demand and production challenges with its 4680 battery cells. The South Korean battery industry faces pressure as automakers scale back EV plans amid policy uncertainty, with other companies like LG Energy Solution and SK On also experiencing significant revenue losses and joint venture cancellations.

- South Korean battery material maker L&F has reported a significant reduction in the value of its 2023 supply deal with Tesla, from $2.9 billion to $7,386.  
- The decrease is attributed to Tesla's reduced demand for high nickel cathode materials, influenced by challenges ramping up production of 4680 battery cells amid slowing EV demand.  
- The South Korean battery industry is facing increased pressure, with several suppliers reporting order cancellations and scaling back joint ventures due to policy uncertainty and weakened demand for electric vehicles.

South Korea's L&F slashes value of battery material supply deal with Tesla