Hyundai and Ganfeng accelerate EV production with long-term battery deal
Hyundai Motor Company has officially inked a ‘Long-Term Supply Agreement’ with Ganfeng Lithium Group Co., Ltd., a prominent Chinese lithium provider to help strengthen their battery supply for electric vehicle (EV) production. Will we see more Hyundai EVs being sold now or will this backfire on the brand?
Under this EV Battery supply deal, Ganfeng Lithium will be the key supplier of lithium hydroxide products, crucial for Hyundai’s EV battery production and the agreement outlines annual supply quantities, with pricing determined by a specified formula. This will likely save Hyundai some money in the long run.
Moreover, this strategic partnership is set to fuel Hyundai’s electric ambitions, ensuring a stable lithium supply amidst the evolving market conditions. We all know that while the supply chain issues are getting better, there is no realistic way to keep up with EV demand so this may alleviate that a little.
The deal takes effect immediately and is intended to provide the automaker with a stable supply of raw materials as it looks to ramp up global output for battery electric vehicles (BEVs) over the next few years. Details of the deal were not disclosed, including volume and the length of the contract.
On top of that, this was the second direct lithium supply contract signed by the Korean automaker this year after last week’s contract to source lithium hydroxide from Shenzhen Chengxin Lithium Group over the next four years. Hyundai may be over-investing at this point especially since EV demand is faltering in the west but we shall see if this pays off.
Until recently, lithium supply deals have normally been signed by battery manufacturers and these two contracts are Hyundai Motor Group’s first to be signed directly with lithium suppliers. Lithium prices last year plunged to their lowest level since 2021 and the automaker was locking in prices to protect itself from future price spikes.
The deal followed recent moves by other automakers, including General Motors, Volkswagen Group, Tesla and Stellantis, to buy stakes in lithium miners and smelting companies to secure supplies of battery raw materials. Hyundai Motor Group, which includes Hyundai Motor and Kia Corporation, was targeting global BEV sales of 3.6 million annually by 2030.
The contract, effective from 1 January 2024 to 31 December 2027, marks a crucial step toward a sustainable and electrified future. However with companies like Toyota warning against EVs, is electric truly the future?
