LG Chem Secures $18.61 Billion Long-Term Supply Contract with General Motors

LG Chem, a leading battery materials supplier, has announced a significant long-term cathode material supply contract with General Motors (GM). Valued at 24.7 trillion won ($18.61 billion), this strategic partnership aims to leverage LG Chem's cathode plant in Tennessee, U.S., as a production hub to meet the growing global battery material market demand.

Expanding Cooperation and Volume Commitment

Under the contract, effective from 2026 through 2035, LG Chem will supply GM with over 500,000 tons of cathode materials. This quantity is sufficient to power 5 million units of high-performance pure electric vehicles (EVs) with an impressive range of 500km on a single charge.

Reuters noted that this agreement further solidifies the collaboration between the two companies and outlines a specific portion of the agreed volume.

Jeff Morrison, GM's Vice President of Global Purchasing and Supply Chain, emphasized the importance of this contract in establishing a robust and sustainable battery EV supply chain. He stated, "This contract builds on GM's commitment to create a strong, sustainable battery EV supply chain to support our fast-growing EV production needs." Notably, the collaboration with LG Chem will take place in Tennessee, bolstering the North American supply chain during a critical time for the industry.

LG Chem's CEO, Shin Hak-cheol, expressed his enthusiasm for strengthening the strategic cooperation with GM to jointly lead the North American EV market towards a sustainable future. According to a press release, He emphasized the company's dedication to generating unique customer value through world-class productivity and expanding global production bases.

Localized Supply and Expansion Plans

LG Chem plans to commence supplying North American-sourced cathode materials to GM starting in 2026. This coincides with the operation of its cathode materials plant in Tennessee, which has an annual production capacity of 60,000 tons.

The plant will primarily produce NCMA (nickel, cobalt, manganese, aluminum) cathode materials for Ultium Cells, a joint venture between LG Energy Solution and GM. Additionally, LG Chem's cathode materials may be utilized by GM in other EV projects. The company aims to utilize its local supply chain to ensure compliance with the EV subsidy criteria set by the U.S. Inflation Reduction Act (IRA).

The construction of America's largest cathode plant in Tennessee began in December 2023. With this facility, LG Chem plans to strengthen its communication with customers and produce customized cathode materials optimized for North American EVs from the development stage.

By enhancing manufacturing competitiveness in Tennessee, LG Chem aims to meet the evolving needs of its customers and maintain a leading position in the market.

Photo: LG Newsroom