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DETROIT – General Motors plans to spend $19 billion over roughly the subsequent decade through a recent supplier deal to source critical materials for use in electric vehicle batteries from LG Chem, the businesses said Wednesday.
The long-term supplier contract will see LG Chem supply GM with greater than 500,000 tons of cathode materials – include nickel, cobalt, manganese, aluminum – from 2026 through 2035, the South Korean supplier said in a release.
That offer could be enough to power 5 million units of EVs with a variety of greater than 300 miles, it said.
The cathode materials from an LG plant that is currently under construction in Tennessee will supply GM’s three way partnership battery cell plants in North America, including three three way partnership 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 unique agreement was slated to run out after 2030, but the most recent iteration extends the deal one other five years.
EV adoption has been slower than expected, and automakers comparable to GM have been cutting costs or delaying plans.
LG Chem said it goals to “bolster cooperation with GM within the North American market” through the deal.
Jeff Morrison, GM vice chairman of worldwide purchasing and provide chain, said the “contract builds on GM’s commitment to create a robust, sustainable battery EV supply chain to support our fast-growing EV production needs.”
The contract is probably going certainly one of the biggest, if not the biggest, EV supply deals that GM has signed.
The deal suggests GM stays committed to EVs, however the longer contract implies the automaker is adjusting plans to account for slower adoption than previously expected.