Hyundai Motor Group will acquire lithium hydroxide, a key raw material for electric vehicle batteries, from the world’s No. 1 supplier Ganfeng Lithium Group Co. in its second deal of its kind this year to gain the upper hand in the EV materials price war.
Ganfeng Lithium announced that it has inked a contract to supply South Korea’s No. 1 auto group, parent of Hyundai Motor Co. and Kia Corp., lithium hydroxide for four years starting January 1, 2024.
It did not disclose the deal’s details, including the financial terms and total supply volume.
The deal news comes less than two weeks after the Korean auto giant signed a purchase agreement for lithium hydroxide with another Chinese supplier Shenzhen Chengxin Lithium Group Co. over the next four years.
It was the first-ever deal for Hyundai Motor to directly secure a key raw material for EV batteries.
The Korean auto behemoth stayed somewhat muted until recently while its global peers, such as General Motors Co., Tesla Inc., Volkswagen Group and Stellantis NV, have rushed to buy stakes in lithium mines and smelting companies across the world to secure key raw materials for EV batteries.
The latest change in Hyundai Motor’s stance to stockpile key battery materials comes in response to a plunge in lithium prices since last year amid growing oversupply concerns across the world.
Analysts expect the ample reserve of key battery materials secured at competitive prices will protect the Korean carmaker from any volatile price moves, like a sudden lithium price spike, later. It is also expected to help Hyundai Motor gain the upper hand during price negotiations with battery makers.