GM and LG Chem Have Deal on Battery Materials

LG Chem and General Motors (NYSE: GM) announced today a binding agreement for the supply of Cathode Active Material (CAM) from LG Chem to GM.

The supply agreement – the latest in the EV battery ‘gold rush’ – will help GM meet its growing EV production needs. CAM is a key battery material consisting of components such as processed nickel, lithium and other materials representing about 40% of the cost of a battery cell.

LG Chem plans to provide GM more than 950,000 tons of CAM over eight years, enough for approximately 5 million units of EV production. CAM bought by GM will be used by Ultium Cells LLC, a joint venture between GM and LG Energy Solutions, to aid GM’s goal of 1 million EV production capacity in North America by end of 2025. GM now has contractual commitments with planned partners for all battery raw material to have 1 million units of EV capacity by the end of 2025.

“This agreement builds on GM’s commitment to create a strong, sustainable battery raw material supply chain to support our fast-growing EV production needs,” said Jeff Morrison, GM vice president, Global Purchasing and Supply Chain. “LG Chem has demonstrated technical expertise, high-quality and mass production capabilities of cathode active materials over the last decade. At the same time, this agreement demonstrates GM’s commitment to strong supplier relationships, and compliments our many other recent EV supply chain announcements.”

The cathode materials that LG Chem plans to supply are NCMA (nickel, cobalt, manganese and aluminum) cathode materials for EVs built on GM’s Ultium Platform. NCMA cathode material is a product that combines LG Chem’s best material technology and is characterized by its excellent stability and output. Aluminum was applied to the material technology to strengthen stability while decreasing the amount of cobalt used in GM’s previous generation of batteries by 70%.

Shin Hak Cheol, CEO of LG Chem, said that “Based upon a close collaboration with customers, LG Chem will further strengthen its position as a global leader in the market by producing the world’s best cathode materials.” GM and LG Chem will also explore localization of CAM production in North America by mid-decade.