LG Chem to make EV batteries with VinFast

LG Chem and Vietnamese carmaker VinFast have launched a joint venture to manufacture batteries in Vietnam.

The joint venture, named VinFast Lithium-ion Battery Pack (VLBP), will lead to the establishment of a battery plant on a 12,000-square-meter plot of land in Haiphong, a city located in northeastern Vietnam.

Lithium-ion battery packs manufactured in the facilities will be immediately inserted into VinFast’s electric scooters and electric cars, which the company plans to start selling by 2020. A long-term goal is to produce premium batteries that abide by international and eco-friendly criteria.

VLBP’s launch was part of an agreement the two companies signed in September for LG to supply batteries to VinFast and co-develop products.

VinFast will be responsible for building warehouses, production lines and operating the plant, including hiring staff. LG Chem will consult on the technology and equipment. Once the plant is completed, the local company will also supervise operations and train workers.

The investment volume of the deal was not disclosed.

In a statement, VinFast said the launch of the joint venture was a move “to increase the localization rate in VinFast’s electric vehicles,” through which it hopes to contribute to Vietnam’s car industry as a whole. Prices and features like fuel efficiency will also be optimized for the Vietnamese market, it said.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]