LG Chem enters agreement to supply General Motors with 500,000 tons of cathode materials, sufficient for about 5 million units of electric vehicles production; contract effective from 2026-2035 upon start of cathode manufacturing plant in Tennessee

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February 7, 2024 (press release) –

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LG Chem inks cathode material supply deal with General Motors worth KRW 25 trillion

-       LG Chem to supply GM more than 500,000 tons of cathode materials enough for approximately 5 million units of Electric Vehicles (EV) production

-       A long-term supply contract to commence from 2026 through 2035 with the start of production of cathode manufacturing plant in Tennessee, U.S., establishing a local supply chain optimized for North American EVs

-       Strengthening cooperation with GM to build a value chain from cathode materials to automobiles

 

SEOUL, February 7, 2023 – LG Chem has secured a long-term cathode material supply contract with General Motors (GM), worth KRW 25 trillion. LG Chem aims to bolster cooperation with GM in the North American market by utilizing its cathode plant in Tennessee, U.S. as a production hub for the global battery material market.

A long-term supply contract to commence from 2026 through 2035, LG Chem will supply GM more than 500,000 tons of cathode materials enough to power 5 million units of high-performance pure EVs with a range of 500km on a single charge.

Following a comprehensive agreement in July 2022 for a long-term supply of cathode materials, this supply contract strengthens the cooperation between the two companies and specifies a portion of the agreed volume.

“This contract builds on GM’s commitment to create a strong, sustainable battery EV supply chain to support our fast-growing EV production needs,” said Jeff Morrison, GM vice president, Global Purchasing and Supply Chain. “Importantly, this work with LG Chem will happen in Tennessee and strengthens the North American supply chain at a critical time for the industry.”

CEO Shin Hak-cheol commented, “By strengthening our strategic cooperation with GM, we will jointly lead the North American EV market to a sustainable future. We aim to create unique customer value through world-class productivity and the expansion of our global production bases.”

LG Chem plans to supply North American-sourced cathode materials to GM starting from 2026, coinciding with the start of production of its cathode materials plant in Tennessee. The NCMA (nickel, cobalt, manganese, aluminum) cathode materials produced in Tennessee plant are expected to be primarily used by Ultium Cells, a joint venture between LG Energy Solution and GM. As this supply agreement is a direct contract with GM, LG Chem’s cathode materials may also be used by GM in other EV projects. LG Chem intends to utilize its local supply chain to ensure that customers, including GM, can meet the EV subsidy criteria set by the U.S. Inflation Reduction Act (IRA).

On December 2023, LG Chem commenced the construction of America’s largest cathode plant in Tennessee with an annual production capacity of 60,000 tons. LG Chem plans to use the Tennessee facility as a base for communication with customers, producing customized cathode materials optimized for North American EVs from the development stage. LG Chem will also enhance the manufacturing competitiveness of the Tennessee plant by advancing its engineering technology of the calcination process, securing the world's highest-level annual production capacity of 10,000 tons per line.

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