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Last Updated on 25th June 2024
In a strategic move to solidify its position in the growing lithium iron phosphate (LFP) battery market, LG Energy Solution, a leading Korean battery manufacturer, has entered into a long-term supply agreement with Changzhou Liyuan New Energy Technology, a prominent supplier based in Nanjing, China. This deal is aimed at substantially increasing LG's production of LFP batteries for electric vehicles (EVs) and energy storage systems, although the financial details of the agreement have not been disclosed.
Under the terms of the five-year cathode material supply contract, Changzhou Liyuan will provide LG Energy Solution with approximately 160,000 tons of cathode materials. This quantity is estimated to be adequate for producing batteries capable of powering one million EVs, each with a driving range exceeding 400 kilometers (249 miles) on a single charge.
"This partnership with Changzhou Liyuan strengthens our ability to meet the growing demand for LFP batteries," remarked a spokesperson for LG Energy Solution. "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."
The agreement assumes additional significance against the backdrop of a global EV market experiencing a slowdown, though further clarification or data would enhance understanding in this regard. By concentrating on LFP batteries, LG Energy Solution aims to address a broader segment of the market, particularly in regions where cost-consciousness heavily influences consumer choices.
Strengthen LG's LFP Battery Business: LG Energy Solution aims to solidify its position in the growing LFP battery market by securing a reliable source of cathode materials.
Expand LFP Battery Production: The deal enables LG to significantly increase its production of LFP batteries, catering to the rising demand for cost-effective and stable battery solutions.
Diversify Product Portfolio: This partnership allows LG to diversify its product offerings beyond traditional NCA batteries, reaching a broader market segment seeking cost-conscious options.
The market for LFP batteries is experiencing significant growth due to their lower costs, longer lifespans, and improved safety compared to NCA batteries.
Additionally, the deal reflects LG's efforts to diversify its product portfolio and cater to the growing demand for LFP batteries, particularly relevant in a global EV market experiencing a slowdown.
LG Energy Solution (LGES), formerly known as LG Chem's battery business, is a leading global manufacturer of lithium-ion batteries headquartered in Seoul, South Korea. Established in 2020 as a separate entity from LG Chem, LGES has quickly become a major player in the battery industry, competing with giants like CATL, Panasonic, SK Innovation, and Samsung SDI.
LGES is actively expanding its LFP battery production capacity to cater to the growing demand for cost-effective and sustainable battery solutions. To learn about LGES's upcoming projects, check out our global battery manufacturing database.
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