LG Chem, GM Sign $19 Billion Cathode Supply Deal — Update
By Kwanwoo Jun
South Korea's LG Chem will supply General Motors with nearly $19 billion worth of cathode materials in the coming years, part of the U.S. carmaker's long-term ambitions to become a leader in electric vehicles.
The Seoul-based chemical company said Wednesday that it signed a 10-year deal to provide GM with more than 500,000 tons of cathode materials--enough to make batteries for about five million EVs--beginning in 2026. It said the cathode supply is worth at least 24.75 trillion won ($18.65 billion).
LG Chem will produce the material in Tennessee, where it broke ground on a plant in December as part of plans to boost its role in the North American EV chain. The facility, which it expects will become the largest cathode material plant in the U.S., will produce up to 60,000 metric tons of cathode materials a year starting 2026.
LG Chem said the deal with GM builds on a plan the companies made in 2022 for the long-term supply of cathode materials.
GM didn't immediately respond to a request for comment.
The Detroit automaker has been working to ramp up its budding EV business in recent years. In 2021, it said it planned to phase out nearly all gasoline- and diesel-powered vehicles by 2035, making it among the first automakers to vow a full switch to electric.
Its EV business remains unprofitable, but last week it said it will trim losses on EVs this year after manufacturing issues tripped up launch plans for several models last year. Amid signs of slowing industry-wide EV sales, it also said it plans to introduce some plug-in hybrid models to North America, a strategic shift after years of sidestepping this technology for the U.S. market.
LG Chem's latest deal comes after it inked a deal in October to provide Toyota with cathode materials in North America worth more than $2 billion.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
February 07, 2024 06:04 ET (11:04 GMT)
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