LG Chem said it had signed a binding agreement to supply General Motors (GM) with 950,000 tons of EV battery cathode active materials (CAM) over eight years.
South Korea-based LG Chem is the parent company of the world’s second largest electric vehicle (EV) battery manufacturer LG Energy Solution, which has a strategic partnership with GM in the US called Ultium Cells.
CAM includes processed nickel, cobalt, manganese and aluminum (NCMA), which are estimated to account for about 40% of the value of GM’s EV batteries. LG Chem has agreed to supply the Ultium Cells joint venture plants in Ohio, Tennessee and Michigan with enough CAM to power five million EV battery packs from the second half of 2022 to 2030.
GM said it aims to have production capacity of one million EVs per year in North America by the end of 2025, with LG Chem agreeing to supply all of its CAM requirements in the region by the end of the decade.
LG Chem said it also plans to partner with GM to explore the localization of CAM production in North America by the mid-2020s, in line with the automaker’s strategy of localizing its EV supply chain where possible. .
Jeff Morrison, GM’s VP for Global Procurement and Supply Chain, said in a statement: “This agreement builds on GM’s commitment to create a strong, sustainable supply chain for battery feedstocks to support our rapidly growing EV manufacturing needs. LG Chem has demonstrated technical expertise, high quality and mass production capabilities of cathode active materials for the past ten years. At the same time, this agreement demonstrates GM’s commitment to strong supplier relationships and complements our many other recent EV supply chain announcements.”
He added, “GM has now entered into contractual commitments with strategic partners for all battery feedstocks to support our goal of one million units of EV capacity by the end of 2025.”