GM

GM, LG Chem Ink $19 Bln Cathode Supply Deal

(RTTNews) - General Motors has signed a long-term cathode material supply contract with South Korea's LG Chem worth 25 trillion Korean won or about $18.8 billion. For the auto major, the contract builds on its plan to create a strong, sustainable battery electric vehicle or EV supply chain to support its EV production needs.

The deal will commence from 2026 through 2035 with the start of production of LG Chem's cathode manufacturing plant in Tennessee, U.S., establishing a local supply chain from cathode materials to automobiles.

During the contract, LG Chem will supply GM more than 500,000 tons of cathode materials. This is enough to power 5 million units of high-performance pure EVs with a range of 500km on a single charge.

The latest deal follows a comprehensive agreement signed by both companies in July 2022 for a long-term supply of cathode materials. LG Chem then agreed to provide GM more than 950,000 tons of Cathode Active Material or CAM over eight years.

In its latest statement, LG Chem said it plans to supply North American-sourced cathode materials to GM starting from 2026, coinciding with the start of production of its cathode materials plant in Tennessee.

LG Chem commenced the construction of Tennessee plant, expected to be America's largest cathode plant, in December 2023, with an annual production capacity of 60,000 tons.

It is expected that Ultium Cells LLC, a joint venture between GM and LG Energy Solutions, will primarily use the nickel, cobalt, manganese, aluminum or NCMA cathode materials produced in Tennessee plant.

Due to the latest direct supply agreement, LG Chem's cathode materials may also be used by GM in other EV projects.

LG Chem said it intends to utilize its local supply chain, so that customers, including GM, can meet the EV subsidy criteria set by the U.S. Inflation Reduction Act (IRA).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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