Massive 720,000-ton battery materials deal to supercharge cheaper EVs, data centers

The South Korean battery materials maker signed a Future Cooperation Memorandum of Understanding (MOU) with battery giant LG Energy Solution.

POSCO Future M will supply a 720,000 tons of cathode and anode materials to LG Energy Solution over a seven-year span running from 2027 to 2033. A formal binding contract is scheduled for completion within the year.

The seven-year alliance focuses on supplying critical lithium iron phosphate (LFP) cathodes and synthetic graphite anodes to meet surging demand for affordable EVs and data center energy storage systems.

Seven-year supply deal

The global battery market is shifting away from a sole focus on high-nickel energy density to prioritize cost, fast-charging speed, and supply chain resilience. Growing demand for affordable electric vehicles, along with massive energy needs from AI data centers, has driven this strategic pivot.

Automobile and energy companies are now retooling their technology choices to balance budget-friendly performance with reliable material sourcing.

POSCO Future M is converting high-nickel production lines at its Pohang manufacturing facility to produce lithium iron phosphate (LFP) cathodes. Full-scale shipments to LG Energy Solution will start early next year. These LFP materials will power an expanding lineup of affordable electric vehicles and energy storage systems, marking a strategic operational change for the company.

Long-term cost savings will extend deep into the raw material supply chain. POSCO Group is using its raw resource footprint, tapping brine from lithium salt lakes in Argentina to design next-generation LFP processes with unmatched price competitiveness.

Also, mid- to long-term production of standard ternary NCM cathodes will increasingly incorporate metals recovered directly from recycled batteries.

Development of sodium-ion batteries

Synthetic graphite anode materials is another major pillar of the partnership. POSCO Future M will manufacture synthetic graphite across facilities in South Korea and Vietnam to supply LG Energy Solution.

Fast-charging capabilities and extended battery life cycles depend on synthetic graphite. As Western automakers push to decouple from restricted markets, a stable regional supply is critical.

Next-generation chemistry is already on the joint R&D roadmap. The two corporate powerhouses plan to jointly develop sodium-ion batteries (SIBs), ultra-high-nickel cathodes, and silicon anode technologies to preserve their technical edge through the next decade.

Global trade compliance underpins the entire alliance. Strict rules like the Prohibited Foreign Entity (PFE) guidelines in the United States and the Industrial Accelerator Act (IAA) in Europe have forced battery giants to rethink where every gram of material originates.

POSCO Group’s internal “Triple-Core” strategy — securing steel, strategic mineral resources, and clean energy — gives both companies a fortress against sudden regulatory shocks.

The transition from a premium luxury niche to mass-market accessibility is officially underway. POSCO Future M and LG Energy Solution are placing a 720,000-ton bet that versatility and cost control will define the next era of energy storage.

Reportedly, POSCO Future M has secured LFP cathode supply deals with all three major South Korean battery manufacturers through its new agreement with LG Energy Solution.

The key milestone follows recent supply contracts with SK On valued at 1.1 trillion won in September and Samsung SDI at 6.0515 trillion won earlier this month. Together, those two prior contracts represent roughly 7.1 trillion won in total order value.

Source: https://interestingengineering.com/energy/lg-battery-materials-deal-to-supercharge-evs