GM orders cathode material worth billions from LG Chem

LG Chem has signed a supply contract with General Motors for cathode material worth 25 trillion won (just under 17.6 billion euros). The contract covers the period from 2026 to 2035 for the car manufacturer's North American plans - and not exactly in small quantities.

Under the contract, LG Chem will supply GM with over 500,000 tonnes of cathode material from its Tennessee plant between 2026 and 2035, enough to produce around five million electric cars with a range of around 500 kilometres, according to LG Chem’s calculations. The NCMA cathode materials (nickel, cobalt, manganese, aluminium) produced in Tennessee are expected to be used primarily by Ultium Cells, the joint venture between LG Energy Solution and GM.

Ultium Cells is already building or operating three battery cell factories in the USA: in Ohio, Tennessee and Michigan. The joint venture is supported by a loan of 2.5 billion US dollars from the US Department of Energy. Although there were plans for a fourth joint factory in Indiana, they are no longer being pursued by GM and LGES.

However, GM has secured the right to use LG Chem’s NCMA cathode materials outside of Ultium Cells in the supply agreement. “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,” the press release states.

The order that has now been placed represents part of the delivery volume of more than 950,000 tonnes of cathode material agreed upon between LG Chem and GM in July 2022. This framework agreement provided for deliveries from 2022.

“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, of the current 500,000 tonne agreement. “Importantly, this work with LG Chem will happen in Tennessee and strengthens the North American supply chain at a critical time for the industry.”

LG Chem CEO Shin Hak-cheol added: “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.”

lgchem.com