L&F, SK On ink $10 billion deal for battery materials

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L&F, SK On ink $10 billion deal for battery materials

Published: 25 Mar. 2024, 18:33

SHIN HA-NEE
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L&F, a battery material supplier, signed a $9.95 billion deal with SK On to supply cathode materials for EV batteries, according to its regulatory filing Monday.

With the signing of the long-term contract, L&F will supply SK On with some 300,000 tons of high-nickel cathode materials, which can produce enough batteries to power 3 million EVs, by the end of 2030.

Daegu-based L&F is a cathode producer that became the first company globally to begin mass-producing high-nickel cathodes in January 2021. Its clients include Tesla.

L&F and SK On plan to further bolster their strategic partnership in the development of next-generation EV battery technology and the diversification of their product portfolio.

“Our long-lasting collaboration on battery material development with SK On has come to fruition,” said L&F CEO Choi Su-an.

“We will continue our close cooperation with local battery cell makers and carmakers to further our contribution to enhancing the market competence of Korean companies,” Choi added.

In 2023, L&F swung into the red with an annual operating loss of 224.1 billion won ($167 million) due to a plunge in lithium prices. Its sales, however, rose 19.5 percent on-year to 4.64 trillion won.

"As the regulatory filing specifies the recipients of L&F’s high-nickel cathode material supplies as SK On and the contracting party’s designated entities, the deal may involve the domestic and U.S. production facilities of Hyundai Motor and Kia to which SK On is supplying batteries,” said Meritz Securities analyst Rho Woo-ho in a report Monday.

Rho suggested that “an additional supply contract may be discussed depending on SK On’s supply volume to Hyundai Motor.”

L&F announced a 650 billion-won investment to build a cathode production facility in Daegu in August 2022, and also signed a 2.55 trillion won deal with the city for an EV battery industrial cluster in November of last year.

The share price of L&F briefly soared as high as 199,000 won on the Kospi bourse, up 6.93 percent from the previous trading day, right after market opening on Monday before closing at 186,300 won, 0.11 percent higher.

BY SHIN HA-NEE [[email protected]]