General Motors (GM) has announced a $19 billion supply contract with LG Chem. This partnership between the South Korean chemical company and the Detroit-based automaker is set to run from 2026 to 2035.
Under the terms of this expansive agreement, LG Chem will provide GM with more than 500,000 tons of essential cathode materials, including nickel, cobalt, manganese, and aluminum, materials vital to the production of electric vehicle (EV) batteries. The deal will supply GM with enough materials to produce approximately 5 million EVs.
Those materials will be sourced from LG Chem’s plant in Tennessee, currently under construction, which is poised to become the largest cathode plant in the United States.
This localization of supply chain operations is expected to allow GM to meet the U.S. Inflation Reduction Act’s (IRA) subsidy criteria for federal tax credits on its EVs.
This agreement builds on GM’s commitment to create a strong, sustainable battery raw material supply chain to support our fast-growing EV production needs.Jeff Morrison, GM vice president, Global Purchasing and Supply Chain
This deal arrives at a pivotal moment for GM, which seeks to bolster its market share in the EV sector dominated by Tesla. Despite Tesla’s dominance, GM has made notable inroads with its Chevrolet Bolt EV/EUV models, which was initially set to be retired this year, but has been revived to come back in 2025 as a next-generation model.
Those changes to the plans were made as part of GM’s broader cost-saving strategy, as it seeks to streamline operations and allocate resources more efficiently. The company has also abandoned its previous plan to invest $5 billion in developing new entry-level EVs.