LG Energy Solution is set to sign an LFP (lithium iron phosphate) cathode material supply contract with L&F. The company aims to accelerate its strategy of targeting the energy storage system (ESS) and mid-to-low-priced electric vehicle markets, centered on North America, by securing domestic LFP cathode materials.
According to industry sources on the 13th, LG Energy Solution and L&F are expected to sign a multi-year LFP cathode material supply contract worth up to hundreds of thousands of tons this month. The contract value is expected to reach the trillion-won range. This will be the first time LG Energy Solution has signed an LFP cathode material purchase agreement with L&F.
The two companies have maintained a long-term cooperative relationship centered on ternary systems such as NCM (nickel cobalt manganese). The existing partnership is set to expand into the LFP cathode material sector through this contract.
LFP is widely used in ESS and mid-to-low-priced electric vehicles due to its low cost and high stability. This is why LG Energy Solution is expected to further strengthen its offensive in these two markets based on domestic LFP cathode materials.
The company plans to build a domestic supply chain and enhance competitiveness in response to moves to exclude Chinese battery materials, including regulations related to the U.S. Prohibited Foreign Entities (PFE) list. Following the establishment of local production systems in North America, securing domestic battery materials is also expected to increase policy benefits such as the Advanced Manufacturing Production Tax Credit (AMPC).
L&F, which has established the fastest LFP cathode material Yangsan system domestically, is expanding its cooperation with the country's top three battery makers. In March last year, it signed an LFP cathode material supply contract worth approximately 1.6 trillion won with Samsung SDI for a three-year period starting in 2027, and included an option to supply additional amounts over the following three years. It also signed an ESS-specific LFP cathode material supply contract worth approximately 160 billion won with SK On last month.
An industry official said, "As the ESS market grows rapidly, domestic battery companies are accelerating efforts to build a domestic supply chain," and predicted that "collaboration between battery cell makers and materials companies will also expand further."
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