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Saturday, March 2, 2024

LG Chem inks $19 billion EV battery materials deal with GM

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A rendered image of LG Chem's cathode plant in Tennessee. [LG CHEM]
A rendered image of LG Chem’s cathode plant in Tennessee. [LG CHEM]

 

LG Chem has inked a 25 trillion won ($19 billion) deal with General Motors (GM) for EV battery materials.

The Korean company said Wednesday the deal aims to supply 500,000 tons of cathodes between 2026 and 2035.

That is enough to be used in making batteries for 5 million high-performance EVs that can run at least 500 kilometers per single charge.

Cathodes are one of four main components in making EV batteries that make up more than 40 percent of battery costs.

The cathodes will be manufactured at LG Chem’s plant in Tennessee. LG is currently building a $1.5 billion cathode plant there, with 60,000 tons of production capacity, the largest cathode plant in the United States.

It is scheduled to start operations in 2026.

The NCMA (nickel-cobalt-manganese-aluminum) cathodes will likely be shipped to Ultium Cells, a 50:50 joint battery venture between LG Energy Solution and General Motors. Ultium Cells has three plants in Ohio, Tennessee and Michigan.

LG Chem and General Motors signed a strategic partnership in July 2022 for a stable supply of cathodes.

“LG Chem will lead the North American EV market by continuing our strategic partnership with General Motors,” said LG Chem CEO Shin Hak-cheol.

General Motors CEO Mary Barra visited Korea Wednesday for meetings with Samsung and LG to discuss further business deals in the automotive sector.

It is Barra’s first visit to Korea since 2016 when she was elected as the chair of the board.

Barra held meetings with Choi Yoon-ho, CEO of Samsung SDI, in the morning, possibly about their joint battery plant under construction in Indiana.

LG Chem rose 0.2 percent to close at 463,500 won on Wednesday while LG Energy Solution went up 2.3 percent to close at 386,000 won.

BY SARAH CHEA [chea.sarah@joongang.co.kr]