SEOUL, Jan. 10 (Korea Bizwire) – South Korean electric car battery makers such as LG Chem Ltd. are jacking up their investment to strengthen their standing in the global market, industry sources said Thursday.
Late last year, LG Chem, the country’s leading electric vehicle (EV) battery manufacturer, announced investments totaling 3 trillion won (US$2.67 billion). In October, the country’s largest chemical company said it will invest 2.1 trillion won by 2023 to build an EV battery plant in China in the latest move to meet growing demand for batteries for zero-emissions cars.
The plant in Nanjing in southeastern China, is set to roll out electric vehicle batteries that could power more than 500,000 vehicles, according to LG Chem.
LG Chem has another EV battery plant in Nanjing and has similar operations in South Korea, the United States and Poland.
In November, LG Chem decided to invest 651 billion won in its Polish battery plant to expand capacity.
LG Chem entered the EV battery business in 2009. The company has supplied batteries to global carmakers such as Audi and Renault-Nissan, among others. It currently operates EV battery plants in China, the United States and South Korea.
LG Chem said earlier it aims to raise its EV battery production capacity to 110 gigawatt hours (GWh) by 2020 from the current 34 GWh.
SK Innovation is South Korea’s leading refiner, but it has moved into the EV battery business since 2008 as part of its efforts diversify its operations and find new revenue sources.
In October, SK Innovation also said it plans to invest 400 billion won to build a lithium-ion battery separator plant in China.
Separators are key components of the high capacity electric vehicle power packs that drive electric cars.
SK Innovation aims to raise its EV battery output capacity to 55GWh by 2022 from the current 4.7GWh by building more plants and expanding existing facilities.
The company provides lithium-ion batteries for EVs produced by Kia Motors and China’s state-run Beijing Automotive Industries Holdings.
Samsung SDI, another major player, is also mulling another EV plant in China, with 1 trillion won expected to be spent on the factory, the sources said.
The electric vehicle battery market has been on the rise as automakers race to go electric due to tightened regulations on greenhouse gas emissions.
In particular, the Chinese EV market has considerable growth potential as Beijing is pushing to expand production of environmentally friendly vehicles to reduce pollution.
According to SNE Research, a market researcher on renewable energy, the global EV market is expected to reach 22 million units by 2025, a sharp rise from this year’s estimated 6.1 million units.
Other global EV battery makers such as Japanese player Panasonic and China’s CATL — an EV battery manufacturer — and BYD, are also racing to grab a lion’s share in the fast-growing EV battery market.
“Companies everywhere are increasing spending to take a lead in the market,” said Han Byung-hwa, an analyst at Eugene Investment & Securities. “They are literally in a war to expand capacity.”