Tesla supplier wins huge cathode contract
L&F, a South Korean supplier of electric vehicle battery materials, has secured a $6.8 billion contract to provide cathodes to an unnamed major cell producer in Europe, a key player in the global EV market. The contract, set to run from January 2025 to December 2030, involves the supply of 176,000 tons of cathodes, which is sufficient for the production of approximately 1.76 million electric vehicles. It is speculated that the European client is Northvolt, the continent's largest EV battery maker, capable of producing the requisite amount of battery cells.
Industry sources suggest that Northvolt, which procures batteries for European automakers including Volkswagen, is the likely recipient, especially after it agreed last year to a substantial deal for copper foil with South Korea’s SK Nexilis. The two companies were close to finalizing a larger supply contract in the previous year, but it was delayed due to a downturn in the EV market.
L&F also disclosed plans to expand its business with Northvolt by signing an additional deal, potentially increasing the total value of its cathode supplies to the Swedish battery maker to approximately 20 trillion won. This follows a previous announcement from L&F about a $15 billion deal to supply both existing and next-generation cathode materials in Europe after obtaining quality certification from Northvolt.
The initial phase of the supply will focus on L&F's high-nickel NCMA cathodes, which comprise about 90% nickel, followed by mid-nickel and manganese-rich cathodes. L&F incorporates recycled materials from its subsidiary, JH Chemical Industry, into the cathodes to meet European environmental regulations that mandate reduced carbon emissions and the use of recycled materials in battery production.
This strategic move is part of L&F’s broader aim to diversify its client base, currently dominated by Tesla and LG Energy Solution, which together accounted for 77% of its outputs last year. By 2025, L&F plans to have 50% of its sales from LG Energy, 30% from global EV markets, and 20% from SK On, signaling a shift in its market strategy.
