LG Chem inks deal with electric-car start-up

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LG Chem inks deal with electric-car start-up

LG Chem will supply lithium-ion battery cells to Faraday Future (FF), a would-be competitor to Tesla, the California-based start-up said Tuesday. The two companies are also working to develop the highest-density batteries in the world.

FF revealed its first and only concept electric vehicle at the Consumer Electronics Show in January, the 1,000-horsepower FFZERO1. Its single-seat electric car raised expectations that the carmaker could become a potential contender to Tesla.

FF has yet to roll out production models, but the partnership with LG Chem is expected to speed up its launch of a commercialized car as the companies collaborate on measures to cut production costs and increase the efficiency of battery technology.

“LG Chem worked closely with Faraday Future to develop a tailored cell chemistry to optimize the range and safety of our mass production battery hardware,” said Tom Wessner, vice president of Global Supply Chain at Faraday Future.

Whether the teaming could beat the technology developments of Tesla and its main battery supplier Panasonic is of interest to analysts.

“Our progress so far represents a major step forward in battery technology, and we look forward to growing our partnership and co-developing hardware into the future,” said Lee Woong-beom, chief of the battery business division at LG Chem.

The supplied battery cells will be incorporated into FF’s own battery platform, named “variable platform architecture.”

“This is more than just a supplier agreement between a start-up and one of the largest lithium-ion battery makers in the world,” Fortune magazine reported Tuesday. “These deep partnerships are what can lead to cheaper, more efficient, more powerful batteries, which will, in turn, help make electric vehicles more attractive to consumers.”

Faraday Future, backed by Chinese investor Jia Yueting, head of tech firm LeEco, has been aggressive in building a quality staff for electric vehicle development and has been rapidly expanding in size. It has about 14,000 employees, up from about 200 in 2014.

The deal may be a breather for LG Chem, as analysts have said its performance in the battery business will be key to raising the company’s valuation. The company said last week that it set a goal of 7 trillion won in revenue in 2020 by ramping up its battery business.

The announcement had little effect on LG Chem’s shares. The company’s stock closed at 237,500 ($214.39) won, down 1.66 percent from the previous trading day.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]
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