The final stock-trading Monday of 2025 was not kind to Tesla (TSLA 0.01%) shares. The bellwether electric vehicle (EV) company saw its stock price sag 3.3% that day, on the back of news that a key supplier would be supplying far fewer goods than originally anticipated. The stock dropped a bit more on Tuesday.
Hitting the brakes hard
That supplier is a South Korean company, L&F, which, according to numerous news outlets, disclosed this development in a regulatory filing. The company stated that the total value of a deal to provide high-nickel cathode materials, for use in Tesla's battery cells, now stands at $7,386. That's quite a far distance down from the previous estimate of $2.9 billion.
Image source: Tesla.
Tesla and L&F originally signed their supply deal in 2023, with the term stretching from January 2024 through December 2025.
NASDAQ: TSLA
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In the filing, L&F did not state any reasons for the drastic cut in the value of the Tesla deal. The materials in question are apparently used in the American company's 4680 battery cells. These are comparatively inexpensive to manufacture, which, according to Tesla CEO Elon Musk, would give the company the scope to manufacture a small EV priced at a relatively inexpensive $25,000.
The 4680 is also used in the company's Cybertruck. Despite Musk's enthusiasm for the futuristic-looking car, its sales have been disappointing.
Whatever the cause(s) of the steep decline in the L&F deal, it certainly isn't a great sign for Tesla. The company has struggled with the slowing growth of EV sales overall, and a model like the Cybertruck -- an acquired taste, at best -- isn't helping matters.
