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General Motors Announces Two Major Long-Term Supply Agreements for Enough Lithium and Cathode Material to Build 5 Million EVs

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【Summary】For U.S. automaker General Motors, securing long-term supply deals for the raw materials used to produce EV batteries, such as lithium hydroxide, is essential to reach the company's goal of phasing out gas-powered passenger vehicles by 2035. Now GM has announced two major long-term supply deals for enough lithium and cathode materials to build five million EVs, which will be vital to the automaker's electrification plans.

Eric Walz    Jul 27, 2022 10:00 AM PT
General Motors Announces Two Major Long-Term Supply Agreements for  Enough Lithium and Cathode Material to Build 5 Million EVs

As the world's automakers ramp up plans to produce electric vehicles, each will require a reliable supply of raw materials to produce the batteries that will go into millions of electric vehicles in the future.

For U.S. automaker General Motors, securing long-term supply deals for the raw materials used to produce EV batteries, such as lithium hydroxide, is essential in order to reach its goal of phasing out gas-powered passenger vehicles by 2035. Now GM has announced two major long-term supply deals for lithium and cathode materials which will be vital to the automaker's electrification plans.

Battery maker LG Chem and GM announced a binding agreement for the supply of Cathode Active Material (CAM) to the automaker. The new supply agreement will help GM reach its EV production goals. 

CAM is a key EV battery material. It includes processed nickel, lithium and other materials representing about 40% of the total cost of a battery cell, according to GM. The cathode materials that LG Chem plans to supply GM are NCMA (nickel, cobalt, manganese and aluminum). It will be used for the EVs built on automaker's Ultium Platform

GM's Ultium family of EV powertrains include five different units and three electric motors which are configurable for rear wheel, front wheel and all-wheel-drive electric models. It will provide significant advantages over GM's previous EVs in performance, scale, speed to market and manufacturing efficiencies, the automaker said. 

NCMA cathode material combines LG Chem's best material technology and is characterized by its excellent stability and output. The aluminum was applied to the material technology to improve stability, while decreasing the amount of expensive cobalt used in GM's previous generation of batteries by 70%.

"Based upon a close collaboration with customers, LG Chem will further strengthen its position as a global leader in the market by producing the world's best cathode materials," said Shin Hak Cheol, CEO of LG Chem.

As part of the long-term agreement, LG Chem plans to supply more than 950,000 tons of CAM to GM starting in the second half of 2022 through 2030. It will be enough to build the batteries for around five million EVs. 

The CAM will be used by Ultium Cells LLC, which is GM's EV battery joint venture with LG Energy Solutions. The materials will be supplied to GM's joint venture battery cell plants in Warren, Ohio; Spring Hill, Tennessee; and Lansing, Michigan.

GM and LG Chem alos plan to explore the localization of a CAM production facility in North America by the end of 2025.

"This agreement builds on GM's commitment to create a strong, sustainable battery raw material supply chain to support our fast-growing EV production needs," said Jeff Morrison, GM vice president, Global Purchasing and Supply Chain. "LG Chem has demonstrated technical expertise, high-quality and mass production capabilities of cathode active materials over the last decade."

GM's second long-term supply deal annnounced this week is with Philadelphia-based chemical manufacturing company Livent. As part of the multi-year sourcing agreement with GM, Livent will supply battery-grade lithium hydroxide made primarily from lithium extracted at Livent's brine-based operations in South America. 

Lithium hydroxide is crucial to GM's plans to make higher performance, higher mileage EVs. The lithium hydroxide from Livent will be used in GM's Ultium battery cathodes, which will power the new Chevrolet Blazer EV, Chevrolet Silverado EV, GMC HUMMER EV and Cadillac LYRIQ SUV.

Livent will supply GM with lithium hydroxide over a six-year period beginning in 2025. Over the course of the agreement, Livent will increase the supply of lithium hydroxide from its manufacturing facilities in the U.S. The ultimate goal is for 100% of Livent's hydroxide processing for GM be done in North America.  The partnership with GM will also aid in expanding Livent's North American manufacturing capabilities.

"We are building a strong, sustainable, scalable and secure supply chain to help meet our fast-growing EV production needs," said Morrison. "We will further localize the lithium supply chain in North America over the course of the agreement."

Morrison added that the supply deal with Livent is aligned with GM's approach to responsible sourcing and supply chain management and commitment to building strong relationships with its suppliers.

GM has been working to establish a reliable raw material supply chain over the past two years as the automakers transition to electrification.

Last summer, GM announced a strategic investment and commercial collaboration with lithium producer Controlled Thermal Resources (CTR) to secure local and low-cost lithium in Southern California in the Salton Sea region.  GM said its investment will help support CTR's more environmentally friendly direct extraction process to recover lithium from geothermal brine. 

This lithium produced for GM by CTR will be a closed-loop, direct extraction process that results in a smaller physical footprint and lower carbon dioxide emissions compared to traditional processes like pit mining or evaporation ponds.

In Dec 2021, GM announced plans to form a joint venture with South Korean battery materials company POSCO Chemical to build a factory in North America to process CAM for GM's Ultium EV platform. The two companies are building a new facility in Quebec, Canada.

In April, GM announced another cobalt supply deal with Swiss mining company Glencore. The company will supply GM with cobalt to produce electric vehicle batteries from its Murrin Murrin nickel and cobalt mining operations in Australia. 

The advanced batteries used in GM's Ultium EV platform are not cylindrical, like the ones Tesla uses for all of its vehicles. They are known as "pouch cell" batteries, where the cathode and anode materials are rolled into flat sheets then stacked and enclosed in a flat pouch resembling a big envelope. Cylindrical cells, on the other hand, are rolled into tightly wound cylinders.

The pouch cell batteries offer several advantages, as they can be stacked on top of each other or side by side when installed in a battery pack, reducing unused space. With their smaller size, more individual pouches can fit into a battery pack, which results in a more powerful and energy dense battery that delivers more range per charge. Pouch cell batteries are also much lighter.

The battery energy options in GM's Utium platform will range from 50 to 200 kWh. 


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