POSCO Chemical will start a cathode active material joint venture with General Motors (GM), the No. 1 automaker in the United States.

 

On December 2, POSCO Chemical and GM jointly announced that they would establish a cathode active material joint venture and build a large-scale production plant in North America. The joint venture plans to produce high-nickel cathode active materials from 2024 and supply them to Ultium Cells LLC, GM's EV battery cell manufacturing joint venture with LG Energy Solution. Detailed plans such as the size of the investment and the location of the plant will be disclosed later.

 

POSCO Chemical became the first battery material company to form a public joint venture for cathode active material with an automobile company in North America, where the EV market is rapidly growing. The cathode active material accounts for approximately 40% of the battery cost.

 

POSCO Chemical, which was selected as a cathode active material supplier for Ultium Cells in December 2020, is building a plant with an annual capacity of 60,000 tons in Gwangyang for this purpose. The newly established North American plant will additionally supply large-scale cathode active materials to expand the cooperative relationship with GM.

 

GM established Ultium Cells in 2019 with LG Energy Solution to build a battery cell production plant with an annual capacity of 35GWh in Ohio. Ultium Cells LLC expanded that capacity with the announcement of an additional battery cell facility in Spring Hill, Tennessee, also capable of 35 GWh of battery cell manufacturing capability. It also announced plans to build two additional battery cell factories by the mid-2020s.

 

The joint venture between the two companies is a strategic decision made while the U.S. government is strongly pushing for an eco-friendly mobility policy to replace 50% of new cars sold in the U.S. with EVs by 2030 and a tariff policy to strengthen the domestic battery supply chain. This is expected to preemptively secure leadership in the EV industry in the North American market.

 

By partnering with global automakers, POSCO Chemical will minimize the risk of large-scale overseas investment and enter the North American market stably. Using the joint venture as a stepping stone, the company plans to continuously expand its global cathode active material production capacity in North America, Europe, and China.

 

The reason POSCO Chemical became a joint venture partner with GM was that it was recognized for its material technology, quality, and mass-production capability through close cooperation, such as being selected as a partner to supply both cathode and anode materials, two major materials for batteries, to Ultium Cells. At the time Ultium Cells starts production, POSCO Chemical plans to supply high-nickel NCMA and low-expansion anode materials with reduced battery charging speed and improved stability for next-generation EVs.

 

In addition, the POSCO Group's stable securement of raw materials for battery materials such as lithium, nickel, and graphite served as a differentiated competitiveness. POSCO is pushing for the production of 220,000 tons of lithium and 100,000 tons of nickel by 2030, and has built a solid value chain for the battery materials business by acquiring a stake in a graphite mine in Tanzania and building a battery recycling plant.

 

POSCO Chemical is diversifying its customers by establishing a base for mass production of global battery materials in Korea and the world's three largest automobile markets, North America, China, and Europe, and closely cooperating with major automobile and battery companies.

 

In August of this year, it decided to invest in the construction of a 30,000-ton cathode material and precursor production plant in China. POSCO Chemical plans to expand its annual production capacity of cathode active materials from 105,000 tons in 2022 to 280,000 tons in 2025 and 420,000 tons by 2030.

 

"Our work with POSCO is a key part of our strategy to rapidly scale U.S. EV production and drive innovation in battery performance, quality and cost,” said Doug Parks, GM executive vice president, Global Product Development, Purchasing and Supply Chain. "We are building a sustainable and resilient North America-focused supply chain for EVs covering the entire ecosystem from raw materials to battery cell manufacturing and recycling,"

 

Kyungzoon Min, the CEO of POSCO Chemical, said, “I am delighted to be participating in the project to build a global battery supply chain in cooperation with GM, leading the global electric vehicle industry. We will innovate materials and lead the growth of the global eco-friendly mobility market together with GM.”