November 09, 2024

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(LG Energy Solution)

South Korea's LG Energy Solution has secured a landmark deal with Rivian, the US electric vehicle maker known for its rugged electric trucks and SUVs.

The South Korean battery manufacturer will deliver a total of 67 gigawatt-hours worth of 4695 cells -- named for their 46mm diameter and 95mm height -- over the next five years.

Although neither company disclosed the exact financial details, Korean industry analysts estimate that the deal could be worth at least $8 billion, based on the typical price of $100 per kilowatt-hour for battery cells.

Rivian's electric SUV, the R2, scheduled for release in 2026 (Rivian)

The 4695 cells, part of LG's advanced 46-series cylindrical battery lineup, will initially be used in Rivian's new electric sport utility vehicle, the R2, which is scheduled for release in 2026.

These next-generation batteries represent a significant leap in technology. Compared to the widely used 2170 cylindrical batteries, the 46-series offers more than six times the energy capacity, along with improvements in energy density, power output, and space efficiency.

These upgrades not only enhance vehicle range and performance but also streamline manufacturing processes, reducing production costs and time.



LG’s series of high-profile EV deals

The Rivian contract is part of LG Energy Solution’s larger push to expand its presence in the global EV market. In recent months, the company has signed a series of high-profile battery supply deals with several major automakers. In July, LG announced a partnership with Renault to supply lithium iron phosphate batteries, marking its first large-scale order for this battery type.

While LFP batteries offer lower energy density than LG’s NCMA cells, they are less expensive to produce and have become increasingly popular in Europe and China for more affordable EV models.

LG has also strengthened its foothold in the premium EV market through a recent multi-billion-dollar contract with a Mercedes-Benz affiliate, reportedly for the same 46-series batteries it is supplying to Rivian. In addition, the company has secured a long-term agreement with Ford to supply battery cells and modules for Ford’s new electric commercial vehicle lineup, in a deal that could exceed $13 billion.



New Arizona plant to anchor LG’s US battery production

To support this new partnership and its other US contracts, LG Energy Solution has been investing in a new manufacturing plant in Arizona. This facility will be LG’s first dedicated plant for cylindrical batteries in the US and is designed to serve as a primary production hub for customers like Rivian.

Construction on the Arizona site began this year, and work is progressing rapidly, with the foundation completed and steel framing underway. The plant is expected to be fully operational by 2026, just in time to support Rivian’s R2 production.

“Our 46-series cylindrical batteries, built with proprietary high-nickel NCMA chemistry, are helping us meet the EV market’s call for powerful yet safe energy solutions, and we’re proud to bring these innovations to a growing roster of automakers,” said an official from LG Energy Solution.

LG Energy Solution's battery plant in Arizona (LG Energy Solution)

By Moon Joon-hyun (mjh@heraldcorp.com)