Posco Future M GM NCM Cathode Supply Contract Cut by 80%

Posco Future M GM NCM cathode supply contract underwent a major revision after South Korea-based Posco Future M Co., Ltd. confirmed a substantial reduction in the overall contract value. The agreement, originally signed with General Motors Company, has been impacted by market-driven factors affecting raw material pricing and electric vehicle demand in the United States.
Posco Future M entered into the long-term supply agreement with GM in July 2022 to deliver high-nickel NCM cathode materials to Ultium Cells LLC. Ultium Cells is an electric vehicle battery cell manufacturing venture jointly established by General Motors and LG Energy Solution Ltd. The contract was designed to support large-scale EV battery production over multiple years.
Posco Future M GM NCM Cathode Supply Contract Details
Under the original terms, the supply period was scheduled from January 2023 through December 2025, with a total contract value of KRW 13.8 trillion. This agreement was positioned as a strategic pillar for GM’s EV battery roadmap, ensuring stable access to advanced cathode materials critical for high-energy-density batteries.
However, Posco Future M disclosed that the realized supply value reached only KRW 2.81 trillion during the contract period, representing an approximate 80% reduction from the originally announced contract value. This significant downward revision has materially altered revenue expectations and projected production-linked volumes associated with the deal.
Market Factors Behind the Contract Reduction
The sharp revision in the Posco Future M GM NCM cathode supply contract was primarily driven by two external factors:

• A steep decline in global lithium prices, which directly reduced the monetary value of supplied cathode materials

• A slowdown in EV demand across the United States market, affecting battery production schedules and material procurement plans

Lithium is a core raw material in high-nickel NCM cathodes, and its price volatility has had a pronounced impact on supplier revenues across the battery materials value chain.
Implications for EV Battery Supply Chains
The adjustment highlights the growing sensitivity of long-term battery material contracts to market fluctuations. While physical supply volumes may still broadly track OEM production needs, overall contract values can shift sharply in response to commodity pricing dynamics and regional EV adoption trends. For suppliers such as Posco Future M, this reinforces the strategic need for flexible pricing mechanisms, hedging strategies, and diversified customer exposure within the rapidly evolving global EV ecosystem.