In early 2023, South Korea’s L&F told investors it had secured a battery materials contract linked to Tesla that could be worth as much as $2.9 billion. The announcement landed exactly when the market wanted to believe in the next great EV growth story. Tesla was rolling out its new 4680 battery cells, the Cybertruck was still framed as a future volume monster, and suppliers anywhere near Elon Musk’s orbit were rewarded with instant credibility.
By the final days of 2025, the same contract had been restated to roughly $7,000. Not $7 million. Not $7 billion. Seven thousand dollars.
The numbers alone sound absurd, but the collapse says a lot about how the EV boom was priced, sold, and ultimately repriced.
The promise behind the 4680
The deal was tied to Tesla’s much-hyped 4680 battery, named after its physical dimensions and pitched as a breakthrough that would slash costs, boost range, and simplify manufacturing. Tesla positioned it as a foundational technology—one battery format that could power everything from mass-market cars to the Cybertruck and beyond.To make that vision credible, Tesla lined up suppliers years in advance. These agreements were often framed using projected volumes, not binding purchase commitments. On paper, they looked enormous. In reality, they were conditional bets on Tesla executing flawlessly and demand staying red hot.
As long as the 4680 narrative held, suppliers like L&F were priced as if the growth was already locked in.
What went wrong, fast
Two things cracked at the same time.First, scaling the 4680 proved slower and messier than the marketing suggested. Manufacturing bottlenecks, yield issues, and design changes pushed timelines to the right. Second, the Cybertruck failed to become the demand engine many had assumed. Instead of pulling the supply chain forward, it exposed how fragile the volume assumptions really were.
Once Tesla no longer needed the material volumes initially discussed, the theoretical value of the contract collapsed. When L&F adjusted the figures, the “deal” effectively vanished.
This wasn’t a renegotiation. It was the market discovering that a big number had been built on future expectations rather than firm orders.
The hit to Tesla — and Musk
For Tesla, the damage wasn’t financial in any direct sense. A supplier contract shrinking doesn’t break the balance sheet. What it does hurt is belief.Tesla’s valuation has always relied on a gap between what it is today and what investors expect it to become tomorrow. The 4680 battery was supposed to widen that gap. When suppliers quietly unwind around it, that gap narrows.
That matters even more for **Elon Musk**, whose net worth is overwhelmingly tied to Tesla shares. Every reset in expectations shows up immediately in his paper wealth. A few percentage points off the stock price can mean tens of billions gone, even if nothing dramatic happens operationally.
Who L&F is — and why it mattered
L&F isn’t a household name, but in the EV supply chain it mattered. The South Korean company specializes in high-nickel cathode materials, a critical ingredient for long-range electric vehicles. During the peak of EV optimism, L&F was valued less like a materials supplier and more like a proxy bet on global electrification.That worked—until it didn’t.
When EV demand cooled and flagship customers slowed their plans, L&F was left exposed. Its share price tumbled, and the wealth of its founding family shrank with it. The Tesla-linked contract restatement became the symbol of that reversal: proof that upstream suppliers often feel the pain first when growth stories crack.
The bigger lesson
This wasn’t just a bad deal. It was a reminder of how modern markets price stories.In boom times, expected volumes are treated as guaranteed. In downturns, they’re treated as fiction. The distance between those two views can wipe out billions faster than any operational failure ever could.
A contract once celebrated as strategic is now worth less than a used laptop. And that may be the most honest number it ever had.
Explore how BYD is challenging Tesla in the global EV market with record sales, stronger margins, and rapid expansion. A data-driven comparison of the world’s top electric vehicle companies in 2025.
Hermès just overtook LVMH as the world’s most valuable luxury brand—by doing less.
The economics behind it will change how you think about brand strategy.
They didn’t storm the gates — they bought them.
How Goldman Sachs and J.P. Morgan helped China quietly acquire billion-dollar Western companies — and why Trump’s new tariffs could shut the door for good.
Stealing art might seem risky and impractical—after all, everyone knows when famous artwork has been stolen. Yet, stolen masterpieces continue to move around the world, quietly changing hands for millions of dollars. How does this happen, and why is it still lucrative?
$80M in Debt. Market Share Lost. Reputation Shattered.
How Harley Davidson turned it all around with bold leadership and a passionate community. A MUST-READ for entrepreneurs and business buffs.
Paying yourself too little as a founder = underestimating your worth. Paying too much? You’ll starve your business. Here’s how much you should pay yourself without killing your startup.