LG Energy Solution Reaches Out to Affordable LFP Batteries... Large-Scale Cathode Material Contract with Chinese Company (Comprehensive)

Agreed to Receive 160,000 Tons Over 5 Years Starting This Year
"Need to Have a Diverse Portfolio"

LG Energy Solution has officially entered the mass-market segment of secondary batteries. Until now, the company has focused on producing premium product lines such as NCM (Nickel Cobalt Manganese) and high-nickel NCMA, but it appears to be expanding its market presence.

On the 22nd, LG Energy Solution announced that it has signed a long-term supply contract for LFP (Lithium Iron Phosphate) battery cathode materials for electric vehicles and ESS (Energy Storage Systems) with Chinese cathode material manufacturer Shangzhou Liwon. This is the first purchase contract for mass production. Previously, purchases of cathode materials for LFP batteries were made in small quantities.

Accordingly, LG Energy Solution is expected to receive approximately 160,000 tons of cathode materials for LFP batteries from Shangzhou Liwon over the next five years starting this year. This amount is sufficient to produce batteries for one million electric vehicles capable of driving over 400 km. The two companies plan to discuss additional supply contracts in the future depending on market conditions.

Shangzhou Liwon, established in 2021 in Nanjing, China, is a specialized manufacturer of cathode materials for LFP with an annual production capacity of 310,000 tons. It also has production facilities in Indonesia capable of producing about 30,000 tons of LFP battery cathode materials and plans to expand this capacity to 120,000 tons in the future.

Through this supply contract, LG Energy Solution will be able to accelerate its competitiveness in the LFP battery market. The LFP battery market has been growing recently due to efforts to reduce costs and lower electric vehicle prices. According to industry sources, LFP batteries are known to be about 20-30% cheaper than premium-grade ternary batteries.

The company stated, "The global electric vehicle market has entered a full-fledged growth phase, and consumers' 'choices' are expanding not only in premium product lines but also in mid-to-low-priced mass-market product lines."

Since the end of last year, LG Energy Solution has started full-scale production of LFP batteries for ESS at its Nanjing plant in China. For electric vehicle LFP batteries, the company is preparing for mass production in the second half of 2025 and is in discussions with various customers to secure new supply channels in Europe and North America.

LG Energy Solution Electric Vehicle Battery Poland Factory
[Photo by LG Energy Solution]

Kim Dong-myung, President of LG Energy Solution, recently told reporters at an event, "(The timing for mass production of LFP batteries) will be around the second half of 2025." He did not disclose which factory will produce the LFP batteries for electric vehicles.

LG Energy Solution leads the global market in premium product lines through NCM and high-nickel NCMA. In the mid-to-low-priced mass-market segment, it is strengthening its new product portfolio with high-voltage mid-nickel (Mid-Ni) and pouch-type LFP batteries to meet diverse customer demands.

A company official said, "Price competitiveness is becoming an important criterion in the battery industry, and having a product portfolio that meets various customer requirements is an essential consideration for battery manufacturers."

This content was produced with the assistance of AI translation services.