Contract Details Kept under Wraps
LG Energy Solution will supply batteries to Nikola, a U.S. hydrogen-electric truck company, for eight years from 2022 to 2029.
Nikola announced in a third-quarter earnings report on Nov. 4 that it has signed a long-term battery supply contract with LG Energy Solution on Oct. 20. The company kept the value of the contract and the amount of the batteries to be supplied under wraps.
This marked the first time that LG Energy Solution has struck a battery supply deal with Nikola. Founded in 2015, Nikola had been in the spotlight as a so-called second Tesla since it was listed on the New York NASDAQ stock market in June 2020, But it faced allegations of having exaggerated its hydrogen-electric truck technology and orders.
Currently, Nikola has a factory in Coolidge near Phoenix, Arizona of the United States. It plans to expand facilities to have a production system of 2,400 units per year by 2022. It expects to be able to roll out 20,000 units annually by 2023 after the second stage of its facility expansion. Hydrogen fuel cell trucks will be produced at the same factory, too. LG is currently running a battery plant in Holland, Michigan of the United States.
In addition, Nikola is pushing forward with a plan to build a factory in Ulm, Germany, and produce the electric truck "Tre" in partnership with Italian commercial vehicle company IVECO. The Ulm plant has the ability to produce roughly 2,000 trucks annually.