L&F, a South Korean battery materials firm, is close to finalizing a 5-year contract with Northvolt, a European battery company, to supply cathode materials. The deal, worth approximately $17.6 billion, represents a significant step for L&F in the battery materials market.
The contract came into view after Northvolt certified L&F’s prismatic battery cathode materials, clearing the way for their use in its battery assembly line. The comprehensive supply agreement is expected to be completed by the end of this year.
The terms of the deal indicate that L&F will supply cathode materials valued at $17.6 billion over five years, starting in 2025. This annual supply commitment translates to roughly $3.52 billion, a figure that eclipses L&F’s total sales from the previous year.
Included in the contract is a range of cathode materials, vital for the manufacturing of batteries, intended for automakers such as Volkswagen and BMW. Northvolt, noted for its success in scaling up production, distinguishes itself in the European market, which has typically relied on Asian suppliers for battery components.
The potential agreement also signifies a shift for L&F, promising to diversify its customer portfolio beyond its current primary clients, LG Energy Solution and SK. The move could potentially stabilize its market performance by reducing reliance on a limited number of clients.
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