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DETROIT— General Motors plans to spend $19 billion over about the next decade through a new deal with suppliers to source critical materials for use in electric vehicle batteries from LG Chem, the companies said Wednesday..
The long-term supplier contract will allow LG Chem to supply GM with 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 statement.
That supply would be enough to power five million units of electric vehicles with a range of more than 300 miles, he said.
Cathode materials from an LG plant currently under construction in Tennessee will supply GM's joint venture battery cell plants in North America, including three joint venture plants with an LG spinoff called Ultium Cells.
The partnership was initially announced in July 2022, but without details on price or production location. The original agreement was scheduled to expire after 2030, but the latest version extends the agreement another five years.
Adoption of electric vehicles has been slower than expected and automakers like GM have been cutting costs or delaying plans.
LG Chem said it aims to “strengthen cooperation with GM in the North American market” through the deal.
Jeff Morrison, GM's vice president of global purchasing and supply chain, said, “The contract builds on GM's commitment to creating a robust and sustainable battery electric vehicle supply chain to support our electric vehicle production needs in fast growth”.
The contract is probably one of the largest, if not the largest, electric vehicle supply deals GM has ever signed.
The deal suggests GM remains committed to electric vehicles, but the longer contract means the automaker is adjusting plans to account for slower-than-expected adoption.
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