Proterra to source battery cells from LG Energy Solution
Proterra has reached an agreement with LG Energy Solution for a long-term supply of cylindrical cells. These will be manufactured at an LG Energy Solution factory in the US and supplied to Proterra plants in North America for the production of battery systems for commercial vehicles.
In addition to the US-made battery cells, Proterra and LG Energy Solution have extended their existing battery cell supply agreement until 2024. Together, this secures Proterra a stable supply of battery cells from LG Energy Solution until 2028, according to the company. Proterra manufactures e-commercial vehicles as well as battery systems for itself and third parties. The company has offices in Silicon Valley, South Carolina and Los Angeles.
As part of the new agreement with LGES to supply US-made cells, Proterra has committed to pay a “low nine-figure dollar amount to secure several gigawatt-hours of US-made battery cell capacity annually”. The cylindrical cells are said to have a new, high nickel NCMA chemistry. Both Proterra and LG Energy Solution plan to have the agreement and investment approved by their boards of directors by the fourth quarter of 2021.
Proud to build on the strong relationship with LG Energy Solution and bring battery cell manufacturing to the United States, Gareth Joyce, president of Proterra Powered & Energy, comments on the deal. “The technologies we need to combat the climate crisis and meet the global demand for zero-emission, battery-electric commercial vehicles can and must be built in the U.S. Today’s announcement is a significant step forward in this pursuit and Proterra’s mission of advancing EV technology to deliver the world’s best performing commercial vehicles.”
“The collaboration between LG Energy Solution and Proterra will act as a critical milestone in seizing America’s eco-friendly commercial vehicle industry, already taking a lead in the global market,” agreed Wonjoon Suh, senior vice president and head of the Mobility and IT Battery Division. “LGES will continue to expand our EV battery manufacturing capability in the U.S. and bolster local supply chain to foster clean energy industry in the U.S.”
In March, LGES announced plans to invest more than $4.5 billion (nearly €3.8 billion) in battery production in the US by 2025. Specifically, production capacity in the USA is to increase by 70 GWh to 110 GWh. At least two new factories are planned in this context. The investment plans in the USA will benefit from the 1.8 billion US dollars that LG will receive in the course of the out-of-court settlement with its South Korean competitor SK Innovation in the United States.
Proterra, for its part, entered into a merger with ArcLight Clean Transition Corp. in January in a SPAC transaction that was valued at $1.6 billion on the stock exchange. In the spring, the company also announced two new supply agreements within a few weeks: one with US company Lightning eMotors and another with Swedish startup Volta Trucks. The latter also marked Proterra’s entry into the European truck market.