LG Chemical to supply materials for 5 million GM EVs

SEOUL, July 28 (UPI) -- South Korea's LG Chemical has agreed to supply 950,000 tons of cathode active material to General Motors, enough to build some 5 million electric cars.

CAM is a crucial element in the lithium-ion battery products, representing about 40% of the cost of a battery cell.

LG Chemical announced Wednesday it will begin supplying GM with the material beginning in the second half of this year and through 2030 to help GM achieve its annual production goal of 1 million electric vehicles by 2025.

The company charged with building the EVs using CAM is Ultium Cells, a joint venture between GM and LG Chemical's affiliate Energy Solution.

On Monday, the U.S. Department of Energy said it would provide Ultium a $2.5 billion loan to construct battery factories in three states as part of the Biden administration's efforts to promote electric vehicles.

"This agreement builds on GM's commitment to creating a strong, sustainable battery raw material supply chain to support our fast-growing EV production needs," GM Vice President Jeff Morrison said in a statement.

"At the same time, this agreement demonstrates GM's commitment to strong supplier relationships and complements our many other recent EV supply chain announcements," he said.

Morrison added that GM had contractual commitments secured with strategic partners on all the raw materials needed for its batteries to support its goal.

LG Chemical Vice Chairman Shin Hak-cheol said his company would further strengthen its position as the sector's leading business by closely collaborating with its customers.

Experts point out that more and more automakers are signing up for strategic partnerships with battery makers.

"In the automotive industry, two things are certain. One is that the number of electric vehicles will continue to skyrocket in the future. The other is that the carmakers will struggle to secure enough batteries in the process," Daelim University automotive Professor Kim Pil-soo told UPI News Korea.

"Hence, everyone is trying to form strategic partnerships with battery makers, with GM joining hands with LG Chemical," he said.