LG Energy Solution has officially embarked on building a robust supply chain to expand its LFP (Lithium Iron Phosphate) battery business.

On the 22nd, LG Energy Solution announced that it has signed a long-term supply contract for LFP battery cathodes with Changzhou Lithium Source, a Chinese cathode material producer, for electric vehicles and energy storage systems (ESS).

Beginning this year, LG Energy Solution is set to receive approximately 160,000 tons of cathodes for LFP batteries over the next five years from Changzhou Lithium Source. This amount is sufficient to produce batteries for one million electric vehicles capable of a range of over 400 km, and both companies will discuss potential additional supply contracts depending on market conditions.

Changzhou Lithium Source, established in 2021 in Nanjing, China, is a specialized manufacturer of cathodes for LFP batteries, boasting an annual production capacity of 310,000 tons. The company also has production facilities in Indonesia, capable of producing about 30,000 tons of LFP battery cathodes, with plans to expand this to 120,000 tons in the future.

This supply contract enables LG Energy Solution to rapidly enhance its competitiveness in the LFP battery market.

Since the end of last year, LG Energy Solution has been ramping up production of LFP batteries for ESS at its Nanjing plant. For electric vehicle LFP batteries, largescale production is planned for the second half of 2025, and the company is engaged in discussions with various customers to secure new supply sources in Europe and North America.

In its premium product line, LG Energy Solution is leading the global market with NCM (nickel-cobalt-manganese) and high nickel NCMA technologies. In the mid-range products, the company is enhancing its new product portfolio with high-voltage mid-nickel and pouch-based LFP batteries to respond to diverse customer demands.

LG Energy Solution stated, “Based on over 30 years of experience and overwhelming technological capabilities, we will further enhance our product competitiveness to provide differentiated customer value.”

By Sang-Jin Lee daedusj@autodiary.kr