LG Chem to supply cathode materials to Toyota's N.American plant

LG Chem Ltd. will supply cathode materials to Toyota Motor's North American battery plant, with the South Korean company concluding its second long-term contract with a company other than its subsidiary LG Energy Solution Ltd.

LG Chem on Tuesday said it signed a contract on Friday to supply cathode materials worth 2.8 trillion won ($2.1 billion) with Toyota Motor Engineering & Manufacturing North America, the regional production and technology affiliate of Toyota Motor. The deal expires in 2030.

Based on the accord’s scale, supply of the materials will cover an estimated 600,000-700,000 electric vehicles (EV) per year.

This order is LG Chem’s second long-term deal since July last year, when it agreed to supply General Motors with 950,000 tons of cathode materials enough for five million EVs. LG Chem seeks to raise its share of such materials for sale to buyers other than LG Energy Solution to 40% through more contracts with global companies.

This will be the first use of LG Chem's cathode materials in Toyota Motor’s EVs, and such materials will be sent to the Japanese carmaker’s battery plant under construction in North America. Though using batteries made by Panasonic, Toyota Motor on Thursday signed a deal with LG Energy Solution to receive from the latter nickel, cobalt, manganese and aluminum battery modules.

In addition, LG Chem wants in-house production of the necessary quantities. Since LG Energy Solution uses LG Chem's cathode materials, few technical problems are expected.

Write to Hyung-Kyu Kim at khk@hankyung.com