S Korea's LGES, Renault sign 39GWh LFP battery deal

South Korean battery manufacturer LG Energy Solution (LGES) will supply 39GWh of lithium-iron-phosphate (LFP) batteries to French car manufacturer Renault's electric vehicle (EV) division Ampere from 2025-30.

Under the agreement, LGES will provide LFP batteries in pouch form to Ampere from the end of 2025 through to 2030, said LGES on 2 July. The batteries will come from its facility in Poland where it has a 86GWh battery plant, which is the largest in Europe. This marks the firm's first "large-scale" LFP battery supply deal for EVs, said LGES.

The firm will continue to expand its supply of LFP batteries for EVs, starting with the European market, said the firm. LFP batteries are typically more cost-competitive compared to nickel-manganese-cobalt (NMC) batteries given the materials used, and LGES sees demand rising for the former as demand for affordable entry-level EVs grows.

Ampere earlier said it will be integrating LFP technology alongside the NMC batteries that Renault has been using, because of market volatility and changes in battery technologies. LGES and Chinese battery manufacturer CATL will provide Ampere with LFP batteries and technology, with LGES providing batteries from its Poland facility, and CATL providing the technology until 2030. The three firms will set up an "integrated value chain" in Europe, said Ampere.

The decision to integrate LFP and cell-to-pack technologies — which raises the volumetric density of batteries — will help Ampere in cutting 20pc of its battery costs, said the company. This is part of the firm's roadmap to cut 40pc of costs by 2027 or 2028.

Ampere targets to sell 1mn units of EVs in 2031 with a goal of reaching €25bn ($26.83bn) in revenue that same year through seven of its EV models, said the firm late last year.

Sales of plug-in EVs, which include plug-in hybrid EVs and battery EVs, fell by over 10pc in Europe during May on weak German demand, with sales of hybrid EVs rising by 15pc on the year across the EU, European Free Trade Association and the UK.

By Joseph Ho