LG Chem has signed a massive cathode material supply contract worth 25 trillion won with General Motors (GM). With the U.S. Tennessee cathode material plant at its core, LG Chem plans to strengthen its cooperation in the North American market alongside GM.
LG Chem announced on Feb. 7 that it had signed a cathode material supply contract with GM at the LG Twin Towers in the Yeouido area of Seoul. Under this agreement, LG Chem will supply GM with cathode materials worth at least 24.75 trillion won until 2035.
The volume of cathode materials to be traded between the two companies is expected to exceed 500,000 tons. This quantity of cathode materials is sufficient to manufacture batteries for about 5 million high-performance electric vehicles (EVs) capable of driving 500 km on a single charge.
Having agreed in July 2022 to a comprehensive long-term supply of cathode materials, the two companies have now strengthened their cooperation through this supply agreement, specifying a portion of the agreed volume.
LG Chem plans to supply North American cathode materials to GM starting from 2026, when the Tennessee plant begins full-scale operations. The nickel, cobalt, manganese, aluminum (NCMA) cathode materials produced at the Tennessee plant are expected to be primarily used by Ultium Cells, a joint venture between LG Energy Solution and GM.
As this is a direct contract with GM, LG Chem’s cathode materials could also be used in other GM electric vehicle projects. Through its local supply chain, LG Chem intends to help its clients, including GM, meet the electric vehicle subsidy standards set by the U.S. Inflation Reduction Act (IRA).
The Tennessee plant, which began construction last December, is expected to become the largest cathode material plant in the U.S., with an annual production capacity of 60,000 tons. Located in the central eastern part of the U.S., the Tennessee plant offers excellent geographical accessibility for customer deliveries and raw material imports. It also plans to secure the world’s highest manufacturing competitiveness with a state-of-the-art sintering process design, achieving a production capacity of 10,000 tons per line annually.
Vice Chairman Shin Hak-cheol stated, “By continuing our strategic cooperation with GM, the leading automobile company in the U.S., we will lead the North American electric vehicle market. Through the world’s highest productivity and expansion of global production bases, we will create differentiated customer value unique to LG Chem.”