LG Chem reports EV battery deals

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LG Chem reports EV battery deals

LG Chem, Korea’s largest chemical company, said yesterday it has secured orders to supply electric vehicle (EV) batteries to SAIC Motor, China’s No. 1 automaker, and Qoros as it continues to expand its presence the world’s largest auto market.

The world’s No.1 EV battery producer, which supplies 20 automakers, didn’t release details about the contract, but said its battery will be installed in SAIC’s next generation plug-in hybrid EV and Qoros’s hybrid EV.

The latest contract makes LG Chem the supplier to four Chinese automakers, with three of them in China’s top five. SAIC Motor was the No.1 automaker last year, while First Automobile Works was the third-largest followed by Chang’an Automobile.

The three automakers account for 60 percent - or 10.24 million units - of China’s new car sales in 2013.

LG Chem said Qoros, a joint venture between China’s Chery Automobile and Israel Corp., is a rising automaker expected to experience rapid growth in the near future.

Korea’s largest chemical company said it already has received orders for more than 100,000 EVs from its Chinese customers and expects to have a solid increase in its revenue.

LG Chem’s battery business department last year had sales of 2.58 trillion won ($2.5 billion) and 32.3 billion won in operating profit.

This year, its goal is to increase revenue by 10 percent.

LG Chem, which has manufacturing facilities in Korea and the United States, also announced it is reviewing Chinese companies as potential partners in a joint venture to produce batteries in China. Beijing aims to have 5 million EVs on the road by 2020.

U.S.-based market researcher IHS predicts China will be the fastest growing market in the world for environmentally friendly vehicles.

“Not only Chinese companies, but other global automakers that have plants in China are asking for batteries,” said LG Chem President Kwon Young-soo. “It is inevitable to secure a production base in China in order to react to the growing demand here, so we are trying to make a Chinese base in the second half of this year.”

BY JOO KYUNG-DON [kjoo@joongang.co.kr]
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