LG Energy Solution to supply LFP batteries to Renault
Suh Won-joon, third from right, head of LG Energy Solution's advanced automotive battery division, and Choi Seung-don, second from left, head of the automotive battery research and development division at LG Energy Solution, pose with Renault's executives after signing a contract to supply lithium iron phosphate batteries to electric vehicles (EVs) of the carmaker at the latter's headquarters in Paris, Monday (local time). The Renault executives are Chief Technology Officer Gille Le Borgne, left, Chief Purchasing, Partnerships and Public Affairs Officer Francois Provost, third from left, Ampere Senior Vice President of Powertrain EV Engineering Philippe Brunet, second from right, and Chief Strategy Officer Josep Maria Recasens. Courtesy of LG Energy Solution
LG Energy Solution secured a contract to supply lithium iron phosphate (LFP) batteries to French carmaker Renault, a sector where Chinese manufacturers have been dominant, becoming the first Korean battery cell maker to supply LFP batteries for electric vehicles (EVs), the battery maker said Tuesday.
The company also said it signed another contract with Australian lithium mining company Liontown to receive lithium spodumene, a mineral that contains lithium, for 15 years starting from the end of this year, to ensure a stable supply of lithium, a key raw material for EV batteries.
The global-leading battery cell maker signed a contract to supply LFP battery pouches for EVs at Renault's headquarters in Paris on Monday (local time). The supply period is for five years, from the end of 2025 to 2030, with a total supply amount of about 39 gigawatt-hours (GWh), which is enough to produce about 590,000 full EVs.
"We will provide the best customer value to Renault, a leading European automaker, through our overwhelming technological prowess and quality competitiveness," said Suh Won-joon, head of LG Energy Solution's advanced automotive battery division.
The battery cells will be produced at LG's Poland plant and will be featured in Renault's next-generation EV models.
LG Energy Solution said this contract is meaningful as it is set to supply LFP batteries in the European market dominated by Chinese companies.
"At a time when Chinese battery companies are expanding their presence in the European market with low prices, this supply contract proves LG Energy Solution's unique customer value capability by demonstrating not only technological and quality competitiveness but also price competitiveness," a company spokesperson said.
LG Energy Solution’s battery cell manufacturing plant in Wroclaw in Poland / Courtesy of LG Energy Solution
LFP batteries are known for cheaper prices than nickel, cobalt and manganese batteries and safety due to the use of relatively inexpensive iron and phosphate and their stable chemical structure. As the demand for affordable EVs increases, the demand for LFP batteries is also increasing.
The battery company saw this contract as an opportunity to further strengthen its market competitiveness, as major carmakers are developing and producing EVs at various prices.
Regarding the lithium procurement contract with Liontown, LG said it will invest $250 million in the mining company through convertible notes.
Under the contract, LG will receive a total of 1.75 million tons of lithium spodumene over 15 years starting from the end of this year. The company said this is enough to produce batteries for about 5 million high-performance EVs capable of driving more than 500 kilometers on a single charge.
"The agreement represents another significant step in our value chain investment strategy aimed at enhancing its resilience to market uncertainties," said Kim Dong-myung, CEO of LG Energy Solution. "By partnering with strong players like Liontown, we will continue to secure a stable supply of IRA-compliant critical minerals, fulfilling our efforts to provide competitive power solutions for electrification."