One of South Korea’s major lithium-ion battery maker, LG Chem Ltd., said on Monday that the company would exclusively supply cylindrical batteries to Lucid Motors’ first commercialized electric vehicle (EV), Lucid Air.
LG Chem expects the supply deal contract to enhance the firm’s electric vehicle battery portfolio, adding another major player alongside Tesla to its customer list for EV batteries.
The battery maker announced it signed a long-term partnership from late this year to 2023 with EV startup Lucid Motors. LG Chem would become the EV maker’s sole supplier of cylindrical lithium-ion battery cells, which would power standard versions of the latest luxury EV named Lucid Air.
However, LG did not disclose details of the contract, such as financial terms and total supply volume.
Lucid Motors, established in 2007, initially manufactured EV batteries and platforms but later moved on to build EVs in 2016. As a strong rival of Tesla, the EV maker based in Newark, U.S. comes second in the EV industry. Saudi Arabia’s state fund also backs the company.
Lucid Motors has its manufacturing facilities located in Arizona U.S. with an annual capacity of 20,000 units. The company also aims to increase output to 130,000 units further a year.
LG Chem would supply cylindrical EV battery cells to Lucid Motors, as the contract suggests. The South Korean company would utilize its battery plants in Nanjing, China, and Ochang, Korea. The tech firm would provide the batteries en masse for high-performance EVs.
Lucid Motors will launch the Lucid Air with LG Chem’s new cylindrical battery cell model 21700. The novel battery offers an improvement of 50 percent higher battery capacity over its smaller predecessor 18650 model. Lucid Air is capable of traveling 643 kilometers (400 miles) on a single charge. The EV will launch in the second half of this year.
LG Chem recently ramped up output at its Nanjing plant from 600 million to 1 billion cells a year to maintain stable production.
Kim Jong-hyeon, said that LG Chem’s agreement with Lucid Motors would strengthen the company’s EV battery business portfolio. The contract to supply cylindrical batteries would add to its pouch batteries. Kim is the CEO and head of the energy solution division at LG Chem.
Cylindrical Battery Industry
According to the industry research company SNE Research, the international cylindrical EV battery cell industry is expected to increase by 25 percent yearly from 76.4-gigawatt-hours (GWh) to 150 GWh in 2023 and 227.9 GWh in 2025.