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Renault's EV unit Ampere teams up with LGES, CATL on battery technology

French car maker Renault holds an investor day for its EV unit Ampere in Paris

PARIS/SEOUL (Reuters) -Renault's electric vehicle unit Ampere said on Monday it would include lithium iron phosphate (LFP) technology in its plans to mass produce EVs, teaming up with LG Energy Solution (LGES) and CATL to build a supply chain in Europe.

Western automakers are under pressure to expand their range of chemical battery technologies to meet the needs of all market segments amid fierce competition from their often cheaper Chinese rivals.

"This decision is an effective and cutting-edge response to market volatility and change in technologies," Ampere said in a statement, adding that LFP batteries would equip "several" models of the Renault and Alpine brands over the next years.

The company also pledged to work towards the development of so-called cell-to-pack battery solutions aimed at boosting the range of its EVs, together with South Korea's LGES.

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In a separate statement, LGES said early on Tuesday it had signed a deal to supply 39 gigawatt hours of LFP pouch-type batteries to Renault to power about 590,000 vehicles, adding the battery cells would be produced in Poland.

The deal marks the first LFP battery supply deal for EV use for the South Korean battery maker, LGES said.

Automakers are expanding their use of different types of battery chemistry, such as LFP, in a bid to cut costs to make affordable EVs and avoid supply chain concerns around materials like cobalt.

LGES said the value of the contract had not been confirmed but the contract period was between the end of 2025 and Dec. 31, 2030.

Shares of LGES rose as much as 4.3% on Tuesday morning after the announcement of the deal, but as of 0011 GMT they were trading only 0.4% higher. South Korea's benchmark KOSPI index was down 0.3%.

(Reporting by Tassilo Hummel, Gilles Guillaume, Jack Kim, Ju-min Park and Heekyong Yang; Editing by Dominique Vidalon and Jamie Freed)