GM inks $19 bil. deal with LG Chem as US carmaker's chief visits Seoul

LG Chem CEO Shin Hak-cheol, right, shakes hands with General Motors CEO Mary Barra at the GM Global Tech Center in Michigan in this 2019 file photo. Courtesy of LG Chem

LG Chem inked a $19 billion supply contract with General Motors, Wednesday, as the head of the U.S. carmaker came to Seoul to boost business cooperation with major Korean companies.

The Korean firm said it signed the contract at LG Twin Tower in Yeouido to supply over 500,000 tons of cathode materials from 2026 to 2035. It also explained that the battery materials produced at its Tennessee plant are expected to be primarily used by Ultium Cells, a U.S. joint venture between GM and LG Energy Solution (LGES), an LG Chem subsidiary.

Their agreement came after both companies signed a memorandum of understanding in 2022 to supply 950,000 tons of cathode materials until 2030.

LG Chem declined to confirm whether GM CEO Mary Barra joined the signing ceremony. A GM Korea official declined to confirm Barra’s schedule during her stay in Korea, saying that she is unlikely to visit the company’s factories here this time.

She reportedly met with the CEOs of LGES and LG Electronics at the Korean conglomerate’s headquarters on Wednesday afternoon.

In 2019, LGES established Ultium Cells with GM and began the mass production of electric vehicle (EV) batteries at its plant in the U.S. state of Ohio. Ultium Cells plans to start operating its Tennessee factory during the first quarter of this year and its Michigan plant during the first half of next year.

LG Electronics has also supplied automotive components to GM.

“By strengthening our strategic cooperation with GM, we will jointly lead the North American EV market to a sustainable future," LG Chem CEO Shin Hak-cheol said. "We aim to create unique customer value through world-class productivity and the expansion of our global production bases.”

Jeff Morrison, GM vice president of global purchasing and supply chain, commented that this contract builds on GM’s commitment to create a strong, sustainable battery EV supply chain to support its fast-growing EV production needs.

Industry officials are also keeping a close watch on whether Barra’s visit to Seoul prompts LG to accept GM’s request to give it a larger proportion of tax credits offered to their joint venture in accordance with the U.S. Inflation Reduction Act.

A few hours before her visit to the LG headquarters, the GM CEO went to Samsung Electronics’ building in southern Seoul to meet the CEOs of Samsung SDI, Samsung Display, Samsung Electro-Mechanics and Harman, as well as executives of Samsung Electronics. This suggests that the U.S. carmaker intends to pursue a broader range of cooperation with Korean firms in the mobility sector.

It is unclear whether she met Samsung Electronics Executive Chairman Lee Jae-yong, who departed for the United Arab Emirates at around the time of her arrival in Korea.

The Samsung executives confirmed that their visit to the company building on Wednesday morning was intended to meet the GM CEO, although both companies did not issue any press release on their meeting.

In 2023, Samsung SDI established a joint venture with GM to build an EV battery plant, which is under construction in the U.S. state of Indiana so as to start mass production in 2026. Samsung Display is a supplier of organic light-emitting diode (OLED) for global carmakers, such as Audi and Ferrari.

Harman, a U.S. firm acquired by Samsung in 2016, supplies car audio electronics to Japanese and German carmakers. Other Samsung affiliates have also shifted their focus recently to the production of automotive components.

The GM chief reportedly discussed cooperation with Samsung not only in the battery industry but also in the supply of other auto parts.