LG Chem Signs with Germany’s Audi to Supply Electric Car Batteries

The LG Group company said on August 20 that it signed an agreement with Audi to supply batteries for plug-in hybrid vehicles and micro hybrid vehicles.(image:SarahSphar/flickr)

SEOUL, Aug. 21 (Korea Bizwire) – LG Chem will supply electric car battery packs to Germany’s Audi, a Volkswagen Group company. As the Korean battery maker secures more than a half of the world’s top-ten auto manufacturers as clients, it is in an enviable position to take the leadership in the fast-emerging eco-friendly car battery market.

The LG Group company said on August 20 that it signed an agreement with Audi to supply batteries for plug-in hybrid vehicles and micro hybrid vehicles.

An LG Chem official said, “We are bound by the contract not to reveal the contract terms, but it’s several hundred million dollars for several years.” As most electric and hybrid car makers are moving toward 48-volt lithium-ion batteries away from lead storage batteries, the market is forecast to expand quickly.” The official added that additional orders from Volkswagen Group are also expected given the group’s automobile units use the same platforms for different car models.

Of the top-ten auto makers in the world, six are LG Chem’s clients, accounting for more than a half of the world’s automobile output.(image:LG Chem)

Volkswagen’s chairman Martin Winterkorn said in September last year, “By 2018 we expect the share of electric cars to be as high as 3 percent of our group’s total sales revenue.” In addition to Volkswagen, the group encompasses more than ten auto brands including Audi, Porsche, Scania (Sweden), Skoda (Czech Republic), Bentley (Britain), and Lamborghini (Italy).

With the latest contract, LG Chem has more than a score of customers including GM, Renault-Nissan Alliance, Ford, and Volvo, as well as Korean car makers such as Hyundai and Kia. Of the top-ten auto makers in the world, six are LG Chem’s clients, accounting for more than a half of the world’s automobile output.

LG Chem set its goal to reach the 10-trillion-won sales revenue level from mid- to large-sized batteries for the next five years until 2018. According to automotive research firms like B3 and Navigant Research, the global automotive battery market would reach 13.2 trillion won, of which the lithium-ion battery segment will grow up to 4.6 trillion won by 2018.

By Sean Chung (schung10@koreabizwire.com)