SAIC-GM-Wuling is the second-biggest EV manufacturer in China, which is by far the world’s biggest EV market. Lopal is one of the leading domestic independent lubricant suppliers in the country but has branched out the past couple years.

Since 2021 it has invested significant amounts into producing lithium iron phosphate, which is seen by some as an alternative to lithium cobalt oxide, the prevalent material used to make cathodes in EV batteries. Lithium iron phosphate has less energy density but is more stable and cheaper and not subject to supply chain constraints of a material that includes cobalt.

Lopal, which is headquartered in Nanjing, Jiangsu province, is building a lithium iron phosphate production facility in Indonesia as a joint venture with Stellar Kapital Investments. The first phase of that facility is scheduled to open this spring and will add to smaller wholly owned sites that Lopal already operates in China.

Lopal’s Feb. 16 stock exchange filing said the companies will work with SAIC-GM-Wuling to build a research center and to develop batteries incorporating lithium iron phosphate for the automaker’s EVs. The partnership also intends to develop solutions for recycling those batteries in order to create a circular life cycle for the batteries.

The framework agreement also provides for the research center to develop lubricants and coolants for the joint venture’s EVs and for Lopal to supply those products. It specifically noted, however, that the framework agreement is not a supply agreement.

The filing notes that Lopal and the automaker are not creating a joint venture at this time but says that they may do so in the future. It also said Lopal is already in the midst of several large capital investments, that it’s demand for funds is high at the moment and could affect its ability to contribute financially to the partnership.