LG Chem lands Volvo battery dealLG Chem was selected as the electric vehicle (EV) battery supplier for Volvo Car Group as the Swedish automaker plans to put electric motors in all of its newly-launched cars starting this year.
The companies signed a long-term contract on Wednesday - the exact volume of the deal was not disclosed. Chinese battery maker CATL was also selected by Volvo as an EV battery partner.
How much they will respectively produce for the carmaker was not revealed, but Volvo said in a statement that together the two will ensure a “multibillion-dollar supply of lithium ion batteries over the coming decade.”
LG’s Long Cell lithium ion battery packs will be attached to Volvo’s modular vehicle platforms for electric cars - a standardized combination of core components including the battery pack that can be installed on many EV models rather than designing different systems for each one.
In 2017, Volvo announced that it would only release EVs starting from this year.
It later clarified that it aims to make fully electric cars account for half of its global sales by 2025, but would include EV batteries in every new model from 2019.
Based on this timeline, LG says the Volvo deal is one of the biggest in the industry.
“With today’s agreement, we effectively secured our battery supply for the upcoming decade,” said Martina Buchhauser, Volvo Cars’ senior vice president for procurement.
“By having two suppliers available in each region, we also ensure that we have flexibility in our supply chain going forward.”
EV batteries conventionally have three battery packs linked as one set.
LG’s Long Cell consists of two packs that are longer and have a higher energy density, which the company explains ensures more energy and efficiency.
For LG, the deal not only benefits the company in terms of volume but also in terms of brand power.
LG already has existing EV battery supply deals with 13 of the world’s top 20 automakers, including Mercedes-Benz, Volkswagen, Ford, GM and Hyundai Motor.
Volvo was already one of its clients before Wednesday’s deal was announced.
BY SONG KYOUNG-SON [firstname.lastname@example.org]