GM to spend $19 billion through 2035 to source EV battery materials from LG Chem

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DETROIT — General Motors plans to spend $19 billion over roughly the next decade through a new supplier deal to source critical materials for use in electric vehicle batteries from LG Chem, the companies said Wednesday.

The long-term supplier contract will see LG Chem supply GM with more than 500,000 tons of cathode materials — including nickel, cobalt, manganese and aluminum — from 2026 through 2035, the South Korean supplier said in a release.

That supply would be enough to power five million units of EVs with a range of more than 300 miles, it said.

The cathode materials from an LG plant that’s currently under construction in Tennessee will supply GM’s joint venture battery cell plants in North America, including three joint venture plants with an LG spinoff called Ultium Cells.

The partnership was initially announced in July 2022, but without details around price or production location. The original agreement was slated to expire after 2030, but the latest iteration extends the deal another five years.

EV adoption has been slower than expected, and automakers such as GM have been cutting costs or delaying plans.

LG Chem said it aims to “bolster cooperation with GM in the North American market” through the deal.

Jeff Morrison, GM vice president of global purchasing and supply chain, said the “contract builds on GM’s commitment to create a strong, sustainable battery EV supply chain to support our fast-growing EV production needs.”

The contract is likely one of the largest, if not the largest, EV supply deals that GM has signed.

The deal suggests GM remains committed to EVs, but the longer contract implies the automaker is adjusting plans to account for slower adoption than previously expected.

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Source: https://www.cnbc.com/2024/02/07/gm-lg-chem-ev-battery-materials-deal.html

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