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DETROIT – General engines plans to spend $19 billion over the next decade through a new supplier agreement to source critical materials for use in electric vehicle batteries from LG Chem, the companies said Wednesday.
Under the long-term supplier contract, LG Chem GM will supply more than 500,000 tons of cathode materials – including nickel, cobalt, manganese and aluminum – from 2026 to 2035, the South Korean supplier said in a press release.
That supply would be enough to power 5 million electric vehicles with a range of more than 300 miles, the report said.
Cathode materials from an LG plant currently under construction in Tennessee will supply GM's joint venture battery cell factories in North America, including three joint venture factories with an LG spinoff called Ultium Cells.
The collaboration was initially announced in July 2022, but without details around price or production location. The original agreement was set to expire after 2030, but the latest version extends the deal for another five years.
Adoption of electric vehicles has been slower than expected, and automakers like GM have cut costs or postponed plans.
LG Chem said the deal aims to “strengthen cooperation with GM in the North American market.”
Jeff Morrison, GM's vice president of global purchasing and supply chain, said the “contract builds on GM's commitment to creating a strong, sustainable electric vehicle supply chain to support our rapidly growing electric vehicle manufacturing needs.” “
The contract is likely one of the largest, if not the largest, EV supply agreements GM has signed.
The deal suggests GM remains committed to electric vehicles, but the longer contract implies the automaker is adjusting plans to account for slower adoption than previously expected.