LG Chem had signed an agreement with Changan Automobile to supply batteries for its next generation plug-in hybrid electronic vehicles (PHEV), to be mass-produced in 2016. (image: Graham Davis/flickr)
SEOUL, Aug. 17 (Korea Bizwire) – By signing a deal to supply batteries for electric vehicles (EV) to the largest automaker in China, LG Chem will accelerate its advance into the emerging EV market.
The leading chemicals and battery maker in Korea announced on August 16 that it had signed an agreement with Changan Automobile to supply batteries for its next generation plug-in hybrid electronic vehicles (PHEV), to be mass-produced in 2016.
As a state-run company established in 1862, Changan Automobile has its headquarters and R&D center in Chongging. It is the largest automaker in China, with a workforce of 80,000 and with sales reaching 40 trillion won (US$34.1 billion) last year.
Since 2009, LG Chem has been partnering with Changan on EV battery technologies, and the deal should lead to sales in the hundreds of billions of won annually. Moreover, as Changan is considering expanding use of the PHEV module to be supplied by LG to all of its EV models, additional sales of PHEV batteries are expected in the near future.
With the deal, LG Chem has now signed EV battery supply contracts with more than five of China’s top 10 automakers. The company already inked deals to supply batteries to Great Wall Motor and Dongfeng Motor, China’s No. 2 and No. 3 automakers respectively.
In total, LG Chem will supply 550,000 batteries to major automakers in China after 2016, occupying a more favorable position in the EV market in China. According to IHS, a global market research firm, China is expected to the largest EV market by 2020, beating North American and Europe, with sales of 650,000 units expected annually.
To ride the EV wave, LG Chem plans to establish an EV battery plant with an annual capacity of 100,000 units in Nanjing, with mass production scheduled to begin in 2016.
An official at LG Chem said, “With the Changan deal, we gained a leg up in the EV market in China. By adding more contracts globally, we will lead the market.”
By Kevin Lee (kevinlee@koreabizwire.com)
