LG Chem has won a 3.8 trillion won ($2.6 billion) contract to supply cathodes, a core component in lithium-ion batteries, to an undisclosed U.S. customer. Industry analysts estimate the order amounts to about 100,000 tons of cathodes—enough to equip roughly 760,000 electric vehicles. While LG Chem has not named the buyer, observers suggest the customer could be a major automaker or battery producer expanding domestic manufacturing capabilities.
Under the agreement, LG Chem will ship Korea-made cathodes between November 15 and July 31, 2029. These materials are expected to support battery production in the United States, where electric vehicle makers are seeking to comply with sourcing requirements under the U.S. Inflation Reduction Act (IRA). By supplying cathodes produced in Korea, LG Chem enables its partners to qualify for IRA-linked tax incentives.
LG Chem’s total annual cathode production capacity stands at approximately 150,000 tons, with 60,000 tons at its Cheongju plant, 40,000 tons at Gumi, both in South Korea, and 50,000 tons at its Wuxi facility in China. The new contract represents the company’s largest order since February 2023, when it signed an eight-year, 25 trillion won deal to supply 950,000 tons of cathodes—enough for around five million electric vehicles—to a U.S. automaker.
The agreement comes as LG Chem’s financial performance shows early signs of recovery. In the quarter ending September 2024, the company reported operating profit of 679.7 billion won, a 36.4% increase year-on-year, despite an 11.6% decline in revenue to 11.2 trillion won. LG Chem also has a 2.9 trillion won cathode contract with a North American unit of a leading automaker, with deliveries scheduled to start in 2026.
A company spokesperson said the latest deal highlights LG Chem’s strengthening relationships with global automakers and battery manufacturers. As U.S. supply-chain incentives continue to shape electric vehicle strategies, Korean battery-material suppliers like LG Chem are positioned to benefit.
Source: The Korea Economic Daily Global
