LG Energy Solution (LGES) signed a battery supply agreement with Chinese supplier Changzhou Liyuan New Energy Technology.
Changzhou Liyuan is based in Nanjing, China, and manufactures lithium-iron-phosphate (LFP) cathode materials. Under the supply agreement, Changzhou Liyuan will provide LGES with approximately 160,000 tons of cathode materials.
The Chinese supplier’s 160,000 tons of cathode materials are estimated to be enough to make batteries for up to one million electric vehicles (EVs) with a driving range of over 400 kilometers or 249 miles on a single charge.
“This partnership with Changzhou Liyuan strengthens our ability to meet the growing demand [for] LFP batteries. The company’s expertise and production capabilities will play a pivotal role in expanding our LFP battery offerings and supporting the transition towards a more sustainable future,” said an LGES spokesperson.
Changzhou Liyuan has a production capacity of 310,000 tons. The Chinese supplier also has facilities in Indonesia with a production capacity of 30,000 tons of LFT cathode materials. Changzhou Liyuan aims to increase the factory’s production capacity in Indonesia to 120,000 tons.
The cathode materials will go toward LFP batteries for electric vehicles and energy storage systems (ESS). LGES started producing LFP batteries of EES in Chinese at the end of 2023. It plans to mass-produce LFP batteries for EVs in the second half of 2025.
LGES supply agreement with Changzhou Liyuan appears to be for LFP batteries that will be used in products for the Chinese market. The Korean company is seeking separate agreement deals for European and North American products.
Late last year, LG Energy Solution launched a residential EES tailor-fit for households in the United States. Around Valentine’s Day 2024, the Korean company announced that it would start producing Tesla’s 4680 battery cells in Korea at the end of the year. Although it is thinking of mass-producing the 4680 battery cell in its China-based factory in Nanjing.
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