South Korean battery materials maker L&F said on Monday that the value of its 2023 supply agreement with Tesla has fallen sharply to $7.386 million, down from an earlier projection of $2.9 billion.

The company said in a regulatory filing that the revision reflects changes in market conditions and order volumes, though it did not provide further details on the reasons for the decline.

In 2023, L&F announced it had signed a contract to supply high-nickel cathode materials to Tesla and its affiliates in the United States and other regions, with deliveries scheduled from January 2024 through December 2025.

The original announcement had valued the contract at about $2.9 billion, making it one of L&F’s largest overseas supply agreements at the time and a key part of its expansion into the U.S. electric vehicle supply chain.

Battery material suppliers have faced growing pressure over the past year as electric vehicle demand slowed in several major markets, while increased competition and excess capacity have weighed on pricing and margins across the sector.