One South Korean family has almost reached billionaire status, thanks to a deal with Elon Musk’s Tesla Inc.
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L&F Co., a company that makes cathodes for electric vehicle batteries, landed a $2.9 billion order from Tesla, according to a 2023 Bloomberg report. This windfall has pushed the Jae-hong family‘s net worth to over $800 million.
L&F might not be a name you recognize, but it plays a big role in the electric vehicle world. The company was founded in 2000 and began developing cathode materials in 2005. While it has been supplying Tesla through LG Energy Solution for a while, this direct deal with Tesla is a major milestone.
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The impact on L&F’s stock was pretty much immediate. After the announcement, the company’s share price skyrocketed by 82% in 2023, making the Jae-hong family, who own a significant chunk of L&F’s shares, some of South Korea’s wealthiest.
There’s more to the Jae-hong family’s story. Hur Jae-hong, the chairman of L&F, is connected to big names like LG Group and GS Group. His great-grandfather, Huh Man-jung, co-founded LG in 1947, highlighting a strong family legacy in business.
This deal is transformative for L&F’s business strategy. Previously, the company relied heavily on LG Energy Solution, which accounted for about 80% of its revenue. By 2025, analysts project this dependence will decrease to 50%, allowing L&F to diversify its client base and strengthen its market position.
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The contract with Tesla is set to run from Jan. 1, 2024, to Dec. 31, 2025. L&F will provide high-nickel cathode materials for use in the automotive, energy generation and storage sectors in the U.S. and other regions.
Industry experts estimate that the contract will supply enough material for over 780,000 electric vehicles. This could significantly boost Tesla’s production capacity, especially for larger vehicles like the Semi and Cybertruck, which are expected to use high-nickel batteries.
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Ripple effects of this deal extend beyond L&F. Other companies in the electric vehicle supply chain, such as Kumyang Co. and Ecopro Co., have also seen their stock prices soar. For instance, Ryu Kwang-ji, the chairman of chemical company Kumyang Co., saw his stake in the firm balloon to $1.4 billion after the share price surged more than 1,600% in the past year
The L&F-Tesla partnership is a prime example of how a big deal can lead to major financial success and shows how quickly the electric vehicle market is evolving.
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This article A Single Deal With Elon Musk’s Tesla Catapulted This Unknown Family To An $800 Million Fortune originally appeared on Benzinga.com
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