POSCO Chemical and General Motors (GM) will establish a joint venture for cathode materials for electric vehicle batteries in the U.S.. It is the first in the world that a global automaker and a battery material company set up a joint venture.
GM received the finished battery products from LG Energy Solution and other companies. However, in the future, the battery will be supplied internally.
On December 2nd, POSCO Chemical and GM jointly announced that they would establish a cathode material joint venture, and build a large-scale production plant in North America. The joint venture plans to produce high-nickel cathode materials starting in 2024, and supply them to Ultium Cells, a producer of electric vehicle batteries for GM. Detailed plans such as investment scale and plant location will be disclosed in the future.
POSCO Chemical will establish a joint venture with an automobile company for the first time as a battery material company. It will establish a battery core material supply chain in North America, where the electric vehicle market is rapidly growing.
The cathode material accounts for about 40% 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 capacity of 60,000 tons in Gwangyang, Korea. The newly established North American plant will supply large-scale cathode materials to expand the cooperative partnership with GM.
GM established Ultium Cells in 2019 with LG Energy Solution, and is building battery cell production plants with an annual capacity of 35 GWh in both Ohio and Tennessee. It announced its plans to build two additional battery cell plants by the mid-2020s.
The joint venture between the two companies is a strategic decision that meet the U.S. government’s desire to strongly push for an eco-friendly mobility policy to replace 50% of new cars sold in the U.S. with electric vehicles by 2030 and a tariff policy to strengthen the domestic battery supply chain. It is expected that the joint venture will be able to preemptively secure the leadership of the electric vehicle industry in the North American market.
By partnering with global auto manufacturer, POSCO Chemical has minimized the risk of large-scale overseas investment, and has stably entered the North American market. Using the joint venture as a stepping stone, the company plans to expand its global cathode material production capacity in North America, Europe, and China.
The reason POSCO Chemical became a joint venture partner with GM was due to its close cooperation by being a selected partner to supply both cathode and anode materials to Ultium Cells; thus, it was recognized for its material technology, quality, and mass-production capabilities. POSCO Chemical plans to supply high-nickel NCMA cathode material, a material for next-generation electric vehicles, and low-expansion anode material with reduced battery charging duration and improved stability at the time Ultium Cells begins its production.
In addition, the POSCO Group's stable securing of raw materials for battery materials such as lithium, nickel, and graphite aided in differentiating competitiveness. POSCO is promoting the production of 220,000 tons of lithium and 100,000 tons of nickel by 2030, and acquired shares of graphite mine in Tanzania. The entire value chain of the battery materials business has been firmly established through the establishment of a battery recycling plant.
POSCO Chemical has established bases for mass production of battery materials in Korea as well as the world's three largest automobile markets: U.S., China and Europe. It is cooperating closely with major auto and battery manufacturers to diversify its customers.
In August of this year, POSCO Chemical decided to invest in the construction of a 30,000-ton cathode material and precursor production plant in China. Starting its investment in North America, POSCO Chemical plans to build production plants in Europe. POSCO Chemical anticipates to expand its annual production capacity of cathode materials from 105,000 tons in 2022 to 280,000 tons in 2025, and 420,000 tons by 2030.
Doug Parks, executive vice president of global product development at GM, said, “Working with POSCO Chemical is the key to our strategy to rapidly expand electric vehicle production in the U.S., and drive innovation in battery performance, quality and cost. GM is building a sustainable and resilient North American supply chain for electric vehicles that spans the entire ecosystem, from raw materials to battery cell manufacturing and recycling.”
Kyung-joon Min, president of POSCO Chemical, said, “We will be participating in the global battery supply chain construction project in cooperation with GM, which leads the global electric vehicle industry. Based on POSCO Group’s world-class material technology, we will innovate mass production capacity, and raw material competitiveness, and lead the global eco-friendly mobility market with GM.”
By Staff Reporter Tae-jun Park (gaius@etnews.com)