LG Energy Solution Ltd.’s research and development campus in Jaejeon, central South Korea (Image courtesy of Yonhap)
SEOUL, Feb. 22 (Korea Bizwire) — LG Energy Solution Ltd. (LGES), South Korea’s top car battery maker, said Thursday it has signed a long-term cathode supply deal with a Chinese company to expand its lithium iron phosphate (LFP) battery business.
The deal calls for the Changzhou Liyuan New Energy Technology Co. to supply LGES with 160,000 tons of cathode materials for LFP batteries used in electric vehicles (EVs) and energy storage systems over the next five years, LGES said.
The amount is enough to power 1 million EVs traveling more than 400 kilometers on a single charge, the company said.
LGES said the two companies are planning to discuss additional supply contracts depending on market conditions.
Cathodes, a key EV battery component, determine the power of EV batteries and account for about 40 percent of battery production costs.
An LFP battery is a type of lithium-ion battery known for its enhanced safety features, high energy density and longer life span.
Changzhou Liyuan New Energy Technology, set up in Nanjing, China, in 2021, has an annual capacity of 310,000 tons of cathodes for LFP batteries. The company also has a plant with a capacity of 30,000 tons and is planning to expand its capacity to 120,000 tons down the road.
LGES said the latest contract is expected to help the company to hone its competitiveness in the LFP battery market.
At the end of last year, LGES started producing LFP batteries for energy storage systems in its plant in Nanjing. It aims to begin mass-producing LFP batteries for EVs in the second half of 2025.
LGES said that in order to meet diverse customer needs, it will ramp up efforts to diversify its product portfolio by expanding production of LFP and other mid-end batteries, as well as such premium products as NCM (nickel, cobalt and manganese) and NCMA (nickel, cobalt, manganese and aluminum).
(Yonhap)
