Lucid Motors, LG Chem ink deal on EV batteries

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Lucid Motors, LG Chem ink deal on EV batteries

LG Chem has secured an exclusive three-year deal to supply batteries for the first electric car to be produced by Newark, California-based Lucid Motors.

The Korean battery maker will provide cylindrical battery cells for Lucid Motors’ Lucid Air electric vehicle from the second half of 2020 until 2023, LG Chem announced Tuesday. The companies did not disclose the volume of batteries to be produced.

The Lucid Air is scheduled to start full production in late 2020, and a production version of the vehicle will be unveiled in April at the New York International Auto Show. Lucid Motors started out in 2007 as an electric vehicle battery and powertrain supplier for carmakers, but rebranded into an auto company in 2016. It received over $1 billion worth of investment from Saudi Arabia’s Public Investment Fund in 2018.

The automaker hopes to compete with luxury segment electric vehicles like Tesla, Mercedes-Benz and BMW.

“The advanced battery cells provided by LG Chem effectively allow Lucid to lock in core volume production forecasts for the Lucid Air for the next several years, with additional agreements to be announced in the future for special versions of the EV,” Lucid Air said in a statement.

The U.S. company added that its selection of LG was the result of “comprehensive and proprietary performance tests.”

The supply contract for cylindrical batteries is a meaningful one for LG Chem, as a majority of its past electric vehicle batteries have been the pouch type. Only a few companies employ cylindrical batteries for their electric vehicles, including Lucid and Tesla.

The world’s third-largest electric vehicle battery maker based on 2019 shipments, LG Chem says it supplied cylindrical batteries to an undisclosed electric bus maker in 2018. Reuters reported in January that the company also won a supply deal with Tesla, although LG Chem has declined to confirm the agreement.

“Supplying cylindrical EV batteries to Lucid Motors enforces our portfolio with existing business for pouch batteries,” said Kim Jong-hyun, LG Chem’s president in charge of its energy solution division.

In a conference call earlier this month, LG executives said the company plans to expand the business for cylindrical batteries, anticipating they will be more widely adopted by electric vehicle manufacturers.

Market research firm SNE Research forecasted that the global market for the cylindrical batteries will reach 76.4 gigawatt hours this year, and will grow to 227.9 gigawatt hours by 2025.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]
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