Posco and LG sign global agreement to supply EV battery hardware

A Chevrolet Bolt electric vehicle is seen at Stewart Chevrolet in Colma, California, United States, in this file photo. Electric vehicle maker General Motors is one of the automotive customers of Seoul-based lithium-ion battery cell maker LG Energy Solution. (Reuters-Yonhap)

Steel materials company Posco Holdings and lithium-ion battery cell maker LG Energy Solution have signed a more comprehensive agreement to supply materials for electric vehicle batteries, the companies announced on Monday.

Based on the non-binding agreement signed on Friday, Posco Holding must sign a long-term agreement to supply cathode materials and anode materials to LG Energy Solution before the end of 2022, according to the largest cell manufacturer. battery from South Korea by batteries supplied to cars.

The two companies will also collaborate to develop battery recycling technology and next-generation anode material through a task force.

The latest update builds on a partnership between the two companies, which began in 2012 with Posco supplying cathode materials to LG Energy Solution.

LG Energy Solution said the memorandum of understanding will allow the two companies to navigate uncertainties in the electric vehicle supply chain, with new business rules in place following the Cut Inflation Act. , signed by US President Joe Biden in August, as well as the United States. United States-Mexico-Canada agreement, which entered into force in 2020.

In particular, the Reducing Inflation Act, under which buyers of electric vehicles that do not use Chinese components or materials can obtain a tax credit, puts battery cell manufacturers on alert because purchasing critical materials from China and other U.S.-mandated “foreign entities of concern” will disqualify the EV from tax relief.

“The collaboration will allow (both companies) to maintain a competitive advantage, dealing with the consequences of the signing of the IRA by the United States,” said LG Energy Solution General Manager and Vice President Kwon Young. -soo, in a statement.

Posco Holidngs Chairman Choi Jeong-woo (second from left) and LG Energy Solution CEO Kwon Young-soo (third from left) pose for a photo during a signing ceremony Friday at LG Energy Solution headquarters in Seoul.  (LG Energy Solution)

Posco Holidngs Chairman Choi Jeong-woo (second from left) and LG Energy Solution CEO Kwon Young-soo (third from left) pose for a photo during a signing ceremony Friday at LG Energy Solution headquarters in Seoul. (LG Energy Solution)