LG Energy Solution to secure key EV battery materials from Morocco

LG Energy Solution Ltd. logo [Courtesy of LG Energy Solution]

LG Energy Solution Ltd., the world’s second-largest battery maker for electric vehicles, said on Wednesday it signed a memorandum of understanding with Chinese lithium compound manufacturer Yahua to produce lithium hydroxide in Morocco.

The MOU will enable LG Energy Solution to enhance its supply chain for cathode materials, including lithium hydroxide, which is a key component in high-nickel, high-capacity EV batteries. Morocco is a signatory to the free trade agreement with the U.S. and the European Union, making it an attractive location for the production of lithium hydroxide.

The agreement will also enable LG Energy Solution to respond more flexibly to fast-changing external business environments with regulations such as the U.S. Inflation Reduction Act and the EU’s Critical Raw Materials Act.

The production of lithium hydroxide in Morocco is favorable for meeting the U.S. requirements.

The IRA stipulates that only EVs that use a certain percentage of key minerals from the U.S. or a country that has a free trade agreement with the U.S. can be subsidized.

Yahua is among the world’s leading producers of lithium hydroxide, which is easily synthesized with nickel, making it an essential ingredient in the production of high-energy-density EV batteries.

LG Energy Solution expects to secure a stable supply of high-quality lithium hydroxide by leveraging Yahua’s manufacturing technology.