LG Chem, a leading South Korean chemical company, has inked a monumental $18.6 billion agreement with General Motors to supply electric vehicle (EV) battery materials over the next decade. This strategic partnership is set to deliver at least 500,000 tonnes of cathode materials—key components in EV batteries—sufficient to power 5 million electric vehicles. The materials will be produced at LG Chem’s upcoming factory in Tennessee, starting from 2026, marking a significant step towards accelerating EV production in North America.
Vice Chairman of LG Chem, Shin Hak-cheol, emphasized the company’s ambition to dominate the North American EV market through this collaboration with GM, the leading automaker in the United States. This move aligns with LG Chem’s broader strategy to leverage the growing demand for electric vehicles, fueled by governmental incentives like tax credits for EV purchasers.
However, this deal surfaces at a time when the global appetite for electric vehicles shows signs of deceleration. Hyundai Motor, another South Korean automotive giant, reported a slight decrease in the EV sales ratio in the last quarter of 2023, hinting at evolving market dynamics.
Despite the current market challenges, LG Chem’s deal with GM stands as a testament to its robust position in the EV sector, representing about half of the company’s revenue in 2022. LG Chem and its subsidiary, LG Energy Solution, play pivotal roles within the expansive LG Group, which also encompasses entities like LG Electronics and LG Display. This agreement not only underscores LG Chem’s commitment to the EV market but also signifies a major leap forward in the electrification journey of the automotive industry.
