GM inks three new deals for electric vehicle materials

July 27, 2022

General Motors joins the growing list of automakers that have inked deals to secure the raw materials needed to meet the growing demand for electric vehicles (EV).

On July 26, the automaker announced that it had secured deals with three suppliers that would give it access to lithium, nickel and cathode active material (CAM) in EV batteries. The binding agreements include an agreement with LG Chem which will supple GM with 878 kt (968,000 st) of cathode material between now and 2030, enough to build five million EVs.

Livent will provide GM with significant quantities of lithium for high-performance EVs and POSCO Chemical will provide a near-term supply of CAM from its South Korean operations from 2023 to 2025. CAM is a key battery material consisting of processed nickel, lithium and other materials that makes up about 40 percent of the cost of a battery cell.

The announcement comes a week after rival automaker Ford Motor Co. announced its own agreements with the likes of Rio Tinto and ioneer to source raw material. Tesla, BMW and others have inked similar deals to source raw material.

The Detroit News Press reported that in December, GM announced a joint-venture deal with POSCO Chemical and in March 2022 GM said the new joint-venture will build a factory in Quebec. That plant is under construction, so until it is ready POSCO will deliver CAM to GM from South Korea.
GM also has a joint venture with LG Energy Solution called Ultium Cells LLC to make battery cells for GM’s future EVs. Ultium Cells is building factories in Ohio, Tennessee and Michigan. The plant in Lordstown, OH is scheduled to begin production in August.

“As we move forward, we will increasingly localize our supply chain, just as we have localized battery cell production,” said GM spokesman David Barnas.

GM is investing $35 billion in EVs and self-driving cars with plans to launch 30 new EVs by then.

To make sure all that can happen, GM CFO Paul Jacobson said last month the automaker will continue to form partnerships or invest in raw material suppliers to ensure GM has the parts it needs.

“Everything is on the table when it comes to the way we have to be thinking about some of these commodities that might be in tighter supply in the future,” Jacobson said on June 15.

Chemical manufacturer Livent inked a multiyear sourcing agreement to supply GM with battery-grade lithium hydroxide made primarily from lithium extracted at Livent’s brine-based operations in South America.

In April, GM locked in a multiyear arrangement with Glencore, a company headquartered in Baar, Switzerland, that will supply GM with cobalt from its Murrin Murrin operation in Australia. Cobalt gives the batteries energy, density and longevity.

GM also inked a deal late last year with rare earth mining and manufacturer MP Materials Corp. to produce alloy and magnets for some of GM's upcoming EVs.

In December, GM also announced it has a nonbinding memorandum of understanding with German-based supplier VAC, which makes advanced magnetic materials. It will start making those magnets for GM in 2024. Magnets are an essential part of EV motors and drive units.

At that time, GM spokesman David Caldwell told the Free Press that forming partnerships for raw material sourcing secures GM’s supply chain for EVs and makes the materials more North American-focused.



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