South Korean battery manufacturer LG Energy Solution (LGES) and local steel and chemicals group POSCO Holdings have agreed to strengthen their global collaboration to target a growing share of the global electric vehicle (EV) supply chain.
The agreement was seen in part as a response to recently introduced EV tax credit regulations in the US which favour locally manufactured battery cells. The two companies, which had already been working together for the last decade, agreed to establish a more comprehensive strategic alliance to better respond to growing global demand for EVs and the increasing localisation of supply chains.
LGES, a global EV battery manufacturer, has been expanding aggressively in the global EV battery segment, particularly in North America where it is building several plants including through joint ventures with General Motors and Stellantis.
Posco has been investing heavily in recent years in the battery materials sector to reduce its heavy dependence on global steel sales. It has a number of off-take agreements with mining companies in Australia and South America and has established a number of raw materials processing plants.
LGES agreed to share with Posco its cathode and anode materials purchasing plans for the next seven years to help strengthen long term collaboration. The pair plan to sign long term supply contracts for battery materials and parts this year, establish partnerships in battery recycling and collaborate in the development of new materials.
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By GlobalData
