LG Chem, a top petrochemicals company, has announced an agreement with General Motors to supply electric vehicle (EV) battery cathodes.
The deal, valued at 24.7 trillion won ($18.61 billion), extends from 2026 through 2035, signifying a significant step forward in the burgeoning EV market.
LG Chem in a news statement said it intends to provide over 500,000 tonnes of materials necessary for cathode production. This quantity is estimated to be adequate for powering approximately 5 million electric vehicles.
The announcement underscores LG Chem’s commitment to fueling the global transition towards sustainable transportation solutions.
LG Chem is currently in the process of constructing a battery cathode plant in Tennessee, United States. Scheduled to commence mass production in 2026, the facility is poised to play a pivotal role in meeting the burgeoning demand for EV batteries in North America and beyond.
These NCMA (nickel, cobalt, manganese, aluminum) cathode materials, produced at the Tennessee facility, are expected to predominantly serve Ultium Cells, a joint venture between LG Energy Solution and GM. Moreover, given the direct nature of this supply agreement with GM, LG Chem’s cathode materials may also find application in other GM EV projects.
Jeff Morrison, GM’s Vice President of Global Purchasing and Supply Chain, emphasized the significance of the partnership, stating, “This contract builds on GM’s commitment to create a strong, sustainable battery EV supply chain to support our fast-growing EV production needs.”
LG Chem’s CEO, Shin Hak-cheol, expressed enthusiasm about jointly leading the North American EV market towards a sustainable future.
Furthermore, LG Chem intends to leverage its local supply chain to ensure compliance with EV subsidy criteria outlined in the U.S. Inflation Reduction Act (IRA), thus facilitating accessibility to incentives for customers like GM.
The construction of America’s largest cathode plant commenced in December 2023 in Tennessee. With an annual production capacity of 60,000 tons, the facility is poised to serve as a cornerstone for the production of customized cathode materials tailored for North American EVs from the developmental stage onwards.
LG Chem also aims to enhance the manufacturing competitiveness of the Tennessee plant through advancements in engineering technology, targeting the world’s highest annual production capacity of 10,000 tons per line.