US-based automotive manufacturing company, General Motors had signed multi-year agreements with LG Chem, a Korean chemical company, and Livent, a lithium technology company to secure key raw materials used in manufacturing batteries for electric vehicles.
With the latest deals, General Motors said it had lined up supplies for all battery raw materials, including lithium, nickel, cobalt, and cathode active material, and was on course to reach its goal of producing one million EVs annually in North America by the end of the year 2025.
Nudged by the U.S. government and looking to get ahead in a booming market for electric vehicles, automakers are striking deals to source key inputs for batteries, with an aim to localise the supply at some point.
LG Chem will supply General Motors with 968,000 tons of cathode material starting in the second half of 2022 through 2030, enough for about five million electric vehicles, GM said.
Cathode material which is made from processed nickel, lithium, and other materials, represents about 40 per cent of the total cost of a battery cell, according to the company.
The automaker will receive battery-grade lithium hydroxide from Livent over six years starting from 2025, with neither company specifying the quantity.
In both agreements, General Motors and the suppliers will work to localise production. GM’s announcement comes about a week after Ford Motor signed on to China’s CATL to import lower-cost lithium-ion batteries.
“We are building a strong, sustainable, scalable, and secure supply chain to help meet our fast-growing EV production needs,” said Jeff Morrison, VP, Global Purchasing and Supply Chain, General Motors.
Ford said its various agreements will cover about 70 per cent of the material it needs to make two million electric vehicles annually by the year 2026.