By Ernest Scheyder and Paul Lienert
(Reuters) - General Motors Co (NYSE:GM) aims to slash the cost of electric vehicle battery cells and has added Vale to its growing roster of battery material suppliers as the automaker girds for increasing EV competition beyond 2025, GM said on Thursday.
Brazilian mining giant Vale SA (NYSE:VALE) will supply GM with battery-grade nickel for future electric vehicles, starting in 2026, GM executive Doug Parks said on Thursday.
The automaker also expects to cut the cost of its Ultium battery cells to less than $70 per kilowatt-hour "in mid to late decade," according to Parks, who heads GM's global product development, purchasing and supply chain.
The average industry cost for cells with nickel-based cathodes has risen as high as $140 per kWh over the past year, as raw material prices have soared.
Parks said GM is exploring the use of less expensive lithium iron phosphate (LFP) cells to help reduce costs. The company also is testing lithium metal and pure silicon anodes to increase energy storage capacity, as well as solid electrolytes, Parks said.
Under a long-term supply agreement, Vale Canada will provide GM with battery-grade nickel sulfate, a key ingredient in battery cathodes, from a proposed plant in Becancour, Quebec.
The agreement with Vale is the latest in a series of GM deals aimed at locking down the supply of critical battery minerals as the automaker ramps up electric vehicle production in 2025 and beyond.
GM has said it will have the capacity to build 1 million EVs in North America by 2025, and that it has signed agreements with at least 20 battery materials companies, including Livent (NYSE:LTHM) and Glencore (OTC:GLNCY), to supply those vehicles.
The Vale deal, which kicks in the second half of 2026, will supply GM with enough refined nickel for up to 350,000 EVs a year.
More importantly, the Canadian nickel sourced from Vale “will help support EV eligibility for consumer incentives under the new clean energy tax credits in the U.S.,” said Parks.
Vale has existing agreements to supply nickel to Tesla (NASDAQ:TSLA) and Ford Motor (NYSE:F) Co, as well as Swedish battery startup Northvolt.