GM inks cathode deal with LG Chem for Ultium platform

LG Chem to supply NCMA cathode material, which GM says will bring battery costs down to profitable levels.

GM inks cathode deal with LG Chem for Ultium platform
GM has struggled to scale vehicles built on Ultium so far

Detroit heavyweight GM has signed a supply deal to source cathode materials from South Korean battery firm LG Chem to supply the manufacture of its Ultium platform EVs in the US.

The deal, worth nearly $19bn, will lean on LG Chem's upcoming Tennessee cathode material plant and help localise GM's battery supply chain, as well as likely qualify the automaker's EVs for federal subsidies made available under the Inflation Reduction Act (IRA).

The deal is a deepening of ties between the two firms after an initial partnership was signed in July 2022.

Following that comprehensive frame agreement for a long-term supply of cathode materials, this supply contract strengthens the cooperation between the two companies and specifies a portion of the agreed volume, LG Chem says.

"[Under] a long-term supply contract to commence from 2026 through to 2035, LG Chem will supply GM more than 500,000t of cathode materials, enough to power 5mn units of high-performance pure EVs with a range of 500km on a single charge," LG Chem says.

The nickel cobalt manganese aluminium (NCMA) cathode materials produced in LG Chem's Tennessee plant are expected to be primarily used by Ultium Cells, a joint venture between LG Energy Solution and GM.

Ultium is GM's first purpose-built EV platform, which the company says will bring battery costs down to the longstanding industry benchmark average of $100/kWh in the coming years. The automaker also hopes to bring its battery production costs closer to $70/kWh by 2030.

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The NCMA chemistry has been cited by GM as a selling point for Ultium, since its reduced cobalt content can bring down the raw material costs of the battery pack. However, GM has struggled to produce Ultium battery packs at scale, and some analysts have pointed out that the finished packs in some early Ultium-based EVs have shown a poor weight:energy density ratio.

"Until GM demonstrates it can properly execute on Ultium, it is not clear they will achieve any of their goals," says Sam Abuelsamid, principal analyst at Guidehouse Insights.

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