UPDATED. 2024-06-18 18:50 (화)
General Motors aims to procure cathode directly from Posco
General Motors aims to procure cathode directly from Posco
  • Stan Lee
  • 승인 2021.04.02 07:18
  • 댓글 0
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Car giant asks Korean chemical firm to build factory in US
Image: Posco
Image: Posco

Posco has received a direct cathode supply request from General Motors, The Elec learned on Thursday.

The South Korean chemical company must build a cathode factory in US under the condition of the deal.

Posco immediately went into internal review over the request. Company chairman Choi Jeong-woo and other executives were notified of the request immediately. 

Posco Chemical is considering expanding its production capacity abroad. The request will likely met enthusiastically, people familiar with the matter said.

Posco Chemical currently supplies cathode to Ultium Cells, the joint venture between LG Energy Solution and General Motors. The cathode is used in electric cars manufactured by General Motors.

The South Korean chemical company singed a 1.85 trillion cathode supply deal with LG Energy Solution in January 2020.

General Motors’ proposal is likely connected to the US government’s policy to promote manufacturing in the US. The Joe Biden administration is planning to spend US$174 billion to promote electric vehicle production within the US. The plan includes materials and components used in electric cars.

General Motors will secure battery production knowledge through Ultium Cells and use that to build its own ecosystem, a person familiar with the matter said.

For the company to produce its own batteries, procuring cathode stably will be crucial as the material accounts for 40% of battery costs.

Posco Chemical supplies NCMA (nickel, cobalt, manganese and aluminum) cathode to Ultium Cells. 

Cost of raw materials used in battery has risen in recent years. The price of nickel  sulfate, used in precursors for cathodes, has doubled in price since last year to now. This makes Posco’s contract with LG unprofitable.

If Posco Chemical can supply directly to General Motors, it can increase its profitability as well as a stable, continuous demand.  

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