Tesla once signed a deal so large that it briefly turned a little-known business family into paper billionaires. The agreement was valued at an eye-watering $2.9 billion and was closely tied to one of Tesla’s most talked-about vehicles, the Cybertruck.
But within just a few years, that same deal was reduced to only $7,386. Nearly 99 percent of its value disappeared. Reports now suggest that weak Cybertruck sales and battery production problems played a central role in this dramatic reversal.
A $2.9 billion deal of Tesla that changed everything overnight
Around three years ago, Tesla entered into a major supply agreement with a South Korean company that makes battery materials. At the time, Tesla was preparing for the launch of the Cybertruck, a vehicle that had already drawn massive global attention.
The deal centered on supplying essential materials for Tesla’s in-house 4680 battery cells. Tesla designed these batteries specifically to power the Cybertruck and positioned them as a key part of its future strategy. As planned, the agreement was set to begin in January 2024 and continue through December 2025.
According to reports, the projected value of this contract stood at about $2.9 billion. That figure alone was enough to transform the fortunes of the company involved. The family behind the business saw the value of their shares rise sharply, pushing them high up global wealth rankings almost overnight.
At that stage, the deal looked solid. Tesla was confident. The Cybertruck was finally close to production after years of delays. Battery demand was expected to surge. Everything appeared to be moving in the right direction.
However, this optimism did not last. By the end of last year, it became clear that something had gone very wrong. Reports revealed that the same deal, once worth billions, had shrunk to just $7,386. The number shocked investors and industry watchers alike.
The supplier explained that the sharp fall was due to a change in supply quantity. In simple terms, Tesla no longer needed anywhere near the volume of battery materials it had originally planned to buy.
That explanation raised an obvious question. Why did Tesla suddenly need so much less?
Cybertruck delays and battery struggles hit suppliers hard
Analysts quickly connected the dots as new details emerged. Industry observers quoted in global media said Tesla struggled to ramp up production of its 4680 battery cells, which were developed mainly to power the Cybertruck.
Because battery output remained low, Tesla produced fewer battery packs. As a result, vehicle production also stayed limited. Consequently, demand for battery materials dropped sharply, directly affecting suppliers. Meanwhile, the Cybertruck itself failed to sell at the level Tesla had anticipated.
Tesla first unveiled the Cybertruck in November 2019. At the time, its bold shape and big promises captured global attention. Initially, Tesla planned to begin production in 2021. However, the company missed that target.
After that, the schedule kept changing. Tesla pushed production back again in 2022. Then, in early 2023, the company confirmed that production would finally start later that year. In July 2023, Tesla assembled the first Cybertruck. By November 2023, serial production had begun, and the first customer deliveries soon followed.
Even so, the long wait did not translate into strong sales. Before launch, Tesla suggested it could sell as many as 250,000 Cybertrucks a year. In reality, sales fell far short of that goal. During its first year on the market, Tesla sold fewer than 40,000 units. After the initial wave of interest, demand continued to weaken.
By the second quarter of 2025, sales dropped to just 4,306 units. These numbers made it clear that the Cybertruck struggled to attract buyers at scale.
At the same time, analysts pointed to a broader slowdown in global electric vehicle demand. This cooling market affected not only Tesla but also other battery suppliers, many of whom reported reduced orders. However, the Cybertruck stood out because its performance was tightly linked to Tesla’s 4680 battery program.
Since Cybertruck production remained limited, Tesla no longer needed the massive volume of batteries it had once planned to use. As a result, the impact traveled straight down the supply chain, hitting partners hard and shrinking orders dramatically.
From billionaire dreams to a near-zero contract
The collapse of the deal clearly shows how fast fortunes can shift in the electric vehicle industry. At one point, a supplier stood tied to a multi-billion-dollar contract with one of the world’s most recognized carmakers. Soon after, that same contract was almost completely wiped out.
Notably, the value did not fall from $2.9 billion to just $7,386 because Tesla cancelled the agreement outright. Instead, the deal slowly shrank as Tesla reduced order volumes again and again. Each cut mirrored lower production targets and demand for the Cybertruck that fell well below expectations.
The Cybertruck itself has had a difficult journey from concept to reality. Its unusual design divided opinion from the start. While it attracted attention, it also faced criticism. Manufacturing the vehicle proved complex. Battery technology added another layer of difficulty.
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Even after deliveries began, sales momentum failed to build. As a result, Tesla’s battery plans had to adjust. Those adjustments rippled outward, directly affecting suppliers that had geared up for far higher volumes.
For the company involved in the battery materials deal, the impact was severe. The projected revenue that once promised enormous growth effectively vanished. With it went much of the paper wealth created when the deal was first announced.
This episode highlights how dependent suppliers can be on the success of a single product. When that product underperforms, even the largest agreements can shrink to almost nothing.
The Cybertruck remains on sale, and Tesla continues to support it publicly. However, the numbers so far show that the vehicle has not delivered the scale that was once expected. And for at least one supplier, that shortfall turned a historic opportunity into a cautionary tale written in lost billions.
