LG Energy Solution has embarked on establishing a solid supply chain for the expansion of its lithium iron phosphate (LFP) battery business.
On Feb. 22, LG Energy Solution announced a long-term supply contract for LFP cathode materials used in electric vehicles (EVs) and Energy Storage Systems (ESS) with Changzhou Liyuan New Energy Technology, a Chinese cathode material manufacturer.
Under this agreement, LG Energy Solution is set to receive approximately 160,000 tons of LFP cathode materials from Changzhou Liyuan New Energy Technology over the next five years, starting this year. This quantity is enough to produce batteries for 1 million electric vehicles, each capable of traveling more than 400 km. Both parties plan to discuss additional supply contracts in the future, depending on market conditions.
This supply contract will accelerate LG Energy Solution’s competitiveness in the LFP battery market.
Since the end of last year, LG Energy Solution has started the full-scale production of LFP batteries for ESS at its Nanjing plant in China. For electric vehicles, the company is preparing to start mass production in the second half of 2025 and is currently in talks with various customers to secure new suppliers in Europe and North America.
LG Energy Solution leads the global market with its premium product lineup, including nickel cobalt manganese (NCM) and high-nickel NCMA cathode materials. In the mid to low-end market, the company is enhancing its new product portfolio with high-voltage mid-nickel and pouch-type LFP batteries, catering to diverse customer demand.
LG Energy Solution stated, “Based on over 30 years of experience and overwhelming technological prowess, we will further enhance our product competitiveness to provide differentiated customer value.”