The photo shows the ultimate battery used in GM’s electric vehicles. Courtesy of POSCO Chemical
By Kim Hyun-bin
POSCO Chemical has inked a joint venture (JV) with General Motors (GM) to establish a cathode plant in the United States.
POSCO Chemical and GM jointly announced, Thursday, that they would establish a cathode material JV and build a large-scale production plant in North America. The joint venture plans to produce high-nickel cathode materials from 2024 and supply them to Ultium Cells, a producer of electric vehicle (EV) batteries for GM. Detailed plans, such as investment scale and factory location, are scheduled to be disclosed at a later date.
This agreement marks the first time POSCO Chemical has formed a JV with an automobile company for the resilience of core battery material supply in North America, where the EV market is rapidly growing. The cathode material accounts for about 40 percent of the battery cost.
POSCO Chemical, which was selected as a cathode material supplier for Ultium Cells in December 2020, is building a plant with an annual production capacity of 60,000 tons in Gwangyang, South Jeolla Province, to better aid the purpose. The newly established North American plant will provide an additional supply of large-scale cathode materials and further expand cooperation with GM.
GM launched Ultium Cells in 2019 with LG Energy Solution (LGES) and is building battery cell production plants with an annual production capacity of 35 GWh each in two U.S. states: Ohio and Tennessee. It also announced plans to build two additional battery cell factories by the mid-2020s.
The JV plan is a strategic decision made as the U.S. government is strongly pushing for an eco-friendly mobility policy to transition 50 percent of new cars sold in the U.S. with EVs by 2030, while plans to impose tariffs on battery imports to strengthen the domestic battery supply chain. Through the JV, the company is expected to be able preemptively to secure the lead in the North American EV market.
“I am delighted to take part in the project to build a global battery supply chain in cooperation with GM, who is leading the global EV industry,” Min Kyung-joon, CEO at POSCO Chemical was quoted as saying in a statement. “From utilizing top notch technologies and competitiveness from POSCO Group, we plan to innovate our materials and lead the growth of the global eco-friendly mobility market together with GM.”
By partnering with global automakers, POSCO Chemical could seek ways to minimize the risk of large-scale overseas investment. From that standpoint, the creation of the JV is being considered a stepping stone, as the company plans continuously to expand its global cathode material production capacity in North America, Europe and China.
Once Ultium Cells starts production, POSCO Chemical plans to supply high-nickel NCMA anode materials, which are key in the production of next-generation EVs, and low-expansion cathode materials with reduced battery charging speed and improved stability.
“Our work with POSCO Chemical is a key part of our strategy to rapidly scale U.S. EV production and drive innovation in battery performance, quality and cost,” said Doug Parks, GM executive vice president, global product development, purchasing and supply chain. “We are building a sustainable and resilient North America-focused supply chain for EVs covering the entire ecosystem from raw materials to battery cell manufacturing and recycling.”
In addition, the POSCO Group’s capabilities to secure raw battery materials such as lithium, nickel and graphite have raised the company’s competitiveness. POSCO aims to produce 220,000 tons of lithium and 100,000 tons of nickel by 2030, and has strengthened the overall battery value chain by acquiring a stake in a graphite mine in Tanzania and building a battery recycling plant.Internet Explorer Channel Network