South Korean company LG Chem has signed a deal worth 24.7 trillion won (USD 18.61 billion) to supply electric vehicle (EV) battery cathodes to General Motors starting from this 2026 and go on till 2035. The petrochemicals giant plans to supply more than 500,000 tonnes of materials to make cathodes, enough to power about five million EVs with a range of 500km on a single charge. To scale up production, the company is currently building a battery cathode plant in the US state of Tennessee, which is slated to start mass production in 2026.
The contract will build on General Motors plan to create a strong, sustainable battery electric vehicle or EV supply chain to support its EV production needs. This deal is a follow -up of a comprehensive agreement signed by both companies in July 2022 for a long-term supply of cathode materials. At that time, LG Chem had agreed to provide GM with more than 950,000 tons of Cathode Active Material or CAM over eight years.
To supplement the latest agreement, LG Chem commenced the construction of Tennessee plant, expected to be America’s largest cathode plant, in December 2023, with an annual production capacity of 60,000 tons. It is expected that Ultium Cells LLC, a joint venture between GM and LG Energy Solutions, will primarily use the nickel, cobalt, manganese, aluminum or NCMA cathode materials produced in Tennessee plant.
It is also possible that GM would use LG Chem’s cathode materials for its other EV projects due to the latest direct supply agreement. The company said it intends to utilize its local supply chain, so that customers, including GM, can meet the EV subsidy criteria set by the US Inflation Reduction Act (IRA).