LG Chem signs $18.6 bn cathode supply deal with GM

2024.02.08 16:10:02 | 2024.02.08 17:45:33

A bird’s-eye view of LG Chem’s Tennessee cathode plant [Courtesy of LG Chem]이미지 확대

A bird’s-eye view of LG Chem’s Tennessee cathode plant [Courtesy of LG Chem]

South Korea’s LG Chem Ltd. announced Wednesday that it signed a 24.75 trillion won ($18.6 billion) deal with General Motors Co. (GM) on the supply of cathode materials essential for electric vehicle (EV) batteries.

LG Chem aims to collaborate with GM in strengthening its presence in North America, with a focus on bolstering the EV supply chain.

The signing ceremony took place at the LG Twin Tower in Yeouido, Seoul, in the attendance of GM CEO Mary Barra.

Under the agreement, LG Chem will supply GM with a minimum of 24.75 trillion won worth of cathode materials until 2035. They play a pivotal role, constituting about 40 percent of the battery production cost and influencing core performance factors such as battery lifespan.

The expected volume of cathode materials to be supplied exceeds 500,000 tons, which is sufficient to produce batteries for around 5 million high-performance EVs, each with a range of 500 kilometers.

The cathode materials to be supplied by LG Chem are based on nickel-cobalt-manganese-aluminum (NCMA) technology, a next-generation solution for EV batteries.

By increasing the nickel content to around 90 percent, LG Chem enhances the energy density, while the incorporation of aluminum improves stability and performance. This innovation results in batteries with exceptional stability and output, meeting the stringent requirements of the evolving EV landscape.

The collaboration follows a comprehensive agreement reached in July 2022, where LG Chem and GM committed to a long-term partnership for the supply of 950,000 tons of cathode materials.

The production is set to commence at LG Chem’s Tennessee cathode plant in 2026. The plant, which broke ground in December 2023, is expected to boast an annual production capacity of 60,000 tons, positioning it as the largest cathode materials factory in the U.S.

The strategic location of the Tennessee plant, situated in the central-eastern region of the U.S., ensures superior geographical accessibility for customer deliveries and raw material imports.

“By strengthening our strategic cooperation with GM, we will jointly lead the North American EV market to a sustainable future,” said LG Chem CEO Shin Hak-cheol. “We aim to create unique customer value through world-class productivity and the expansion of our global production bases.”

By Jung You-jung and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]