LG Chem, GM Ink $19B Deal for EV Cathode Supply

General Motors (GM) continues to underscore its unwavering dedication to the electric vehicle (EV) future by forging a substantial partnership valued at nearly $19 billion with LG Chem, the same Korean company that played a pivotal role in EV battery production in Lordstown.

LG Chem, previously a partner with GM in the construction of the Ultium Cells plant in Lordstown, announced on Wednesday that it has finalized a long-term contract for the supply of cathode materials with General Motors. In a press release, LG Chem articulated its objective to enhance collaboration with GM in the North American market by leveraging its cathode plant in Tennessee as a pivotal production hub for the global battery material market.

Last year, LG Chem embarked on the construction of America's largest cathode plant in Tennessee, with an anticipated annual production capacity of 60,000 tons. The company aims to develop customized cathode materials optimized for North American EVs right from the development phase. Commencing in 2026, LG Chem plans to supply GM with cathode materials sourced from North America, aligning with the commencement of production at its Tennessee plant. The nickel, cobalt, manganese, and aluminum cathode materials manufactured in Tennessee are anticipated to primarily serve Ultium Cells.

Given that this supply agreement is a direct contract with GM, LG Chem's cathode materials may find application in other EV projects undertaken by GM. LG Chem expressed its intention to leverage its local supply chain to ensure that customers, including GM, can fulfill the EV subsidy criteria outlined in the U.S. Inflation Reduction Act.

Scheduled to commence in 2026 and extend through 2035, the long-term supply contract will see LG Chem provide GM with over 500,000 tons of cathode materials, sufficient to power 5 million units of high-performance pure EVs with a range of 500 km on a single charge. This agreement builds upon a comprehensive deal reached in July 2022 for the long-term supply of cathode materials, further solidifying the partnership between the two companies and specifying a portion of the agreed volume.

Furthermore, this contract exemplifies GM's steadfast commitment to establishing a robust and sustainable battery EV supply chain to support its rapidly expanding EV production requirements. Importantly, the collaboration with LG Chem will unfold in Tennessee, thereby fortifying the North American supply chain at a pivotal juncture for the industry.

General Motors Co (GM) operates as a leading automotive manufacturer, specializing in the design, construction, and marketing of a wide range of vehicles, including cars, SUVs, crossovers, trucks, and automotive components. Additionally, GM offers automotive financing solutions through its subsidiary, General Motors Financial Company.LG Chem's innovative next-generation growth drivers span from advancements in battery materials to sustainability initiatives and developments in the bio-industry sector.