LG Energy Solution Ltd., a global leader in electric vehicle (EV) battery manufacturing, announced a strategic move to increase its lithium procurement from Australia, reinforcing its commitment to align with U.S. policies favoring domestic and partner country manufacturing. This initiative comes as part of an effort to leverage the benefits offered by the U.S. Inflation Reduction Act (IRA), which incentivizes the production of EVs with locally sourced and processed materials.
In a significant agreement with Wesfarmers Chemicals, Energy and Fertilisers (WesCEF), LG Energy has secured the purchase of up to 85,000 tons of lithium concentrate this year, with discussions on further procurement already planned. This deal is poised to bolster LG Energy’s lithium hydroxide supply, crucial for powering approximately 270,000 EVs capable of exceeding 500 kilometers per charge.
LG Energy’s strategic partnerships, including a five-year commitment to acquire 50,000 tons of battery-grade lithium hydroxide from WesCEF starting in 2025, underscore the company’s proactive approach to ensuring a stable supply of essential raw materials. These collaborations not only secure the materials needed for advanced battery technologies but also guarantee competitive pricing through stable procurement channels.
The IRA’s incentives, offering up to $7,500 per EV, are contingent on vehicles being assembled in the U.S. with batteries containing minerals mined or processed in the U.S. or its trade partners, such as Australia. LG Energy’s engagements with WesCEF, along with its agreements with other leading lithium suppliers, position the company’s products to meet these criteria, enhancing its competitive edge in the North American EV market.
With manufacturing facilities across North America, LG Energy is well-positioned to produce IRA-compliant lithium-ion batteries, contributing to a more sustainable and eco-friendly automotive future. This strategic alignment with U.S. policy and commitment to securing critical raw materials through international partnerships highlights LG Energy’s role as a pivotal player in the global shift towards electrification.
