South Korea’s largest EV battery manufacturer LG Energy Solution (LGES) has signed a major deal to source lithium iron phosphate (LFP) battery cathode materials from China’s Changzhou Liyuan New Energy Technology, according to local reports.
The five year deal involves sourcing 160,000 tons of LFP cathode materials over five years starting this year, enough to power 1m battery electric vehicles (BEVs).
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LGES said it would consider increasing its orders from the Nanjing based company depending on market conditions, to make the most of currently depressed battery materials prices to control future costs.
The deal would also help speed LGES’ entry into the growing market for LFP batteries which are lower cost and offer improved safety compared with many existing battery types. LGES currently makes mostly nickel cobalt manganese (NCM) and high nickel-cobalt manganese aluminium (NCMA) EV batteries.
LGES recently announced plans to begin mass production of LFP batteries for BEVs in the second half of 2025, having already started production for energy storage systems (ESS) at its factory in Nanjing last year. The company is currently in talks with US-based automakers about supplying LFP batteries for future BEV models.
The introduction of LFP batteries in 2025, along with 4680-type batteries later this year, will significantly strengthen LGES’ BEV battery range.
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By GlobalData
