LG Chem EV batteries to hit roads in VietnamLG Chem is set to supply electric car batteries to a Vietnamese automaker, marking its entrance into the Southeast Asian electric vehicle (EV) market.
Korea’s No. 1 battery producer signed a memorandum of understanding on Friday to supply its batteries to VinFast, an auto subsidiary under Vietnamese conglomerate Vingroup, the company announced Monday.
Vingroup is the biggest company in Vietnam by market cap, surpassing 16 trillion won ($14 billion). It has businesses in the retail, hospital and education sectors, among others.
The battery manufacturer will start by supplying its product for VinFast’s electric scooter, scheduled to be mass produced next year at the earliest.
LG Chem will expand its supply to VinFast’s lineup of eco-friendly passenger cars and buses, as well as smartphones depending on the company’s production schedule in the future.
“The Southeast Asian market is expanding fast, and we are securing opportunities through this strategic partnership in the emerging market,” said an official from LG Chem Monday.
The two companies’ partnership includes establishing a joint venture in Vietnam to further collaborate on expanding the eco-friendly vehicle business. The exact timeline of the collaboration hasn’t been decided, according to an LG Chem official.
Under the agreement, LG Chem will provide personnel training to local employees as well as share technology on producing electric car batteries.
VinFast will install assembly lines at the company’s factory located in the port city of Hai Phong in Vietnam, ready for operation by the second quarter of next year.
“The partnership is an important initial step for VinFast in particular and Vingroup in general to grasp global advanced technologies in order to produce premium products and contribute to the development of Vietnam’s support industry,” Vo Quang Hue, deputy CEO of Vingroup, was quoted as saying in local media.
VinFast is an auto brand that was established in September 2017.
It is Vietnam’s first domestic car brand and currently doesn’t have any mass produced models.
It plans to produce 500,000 vehicles by 2025, according to the company. In June, VinFast acquired General Motors’ assembly line in Hanoi.
Diversifying its markets has been a crucial challenge for LG Chem ever since the Chinese government started giving Korean battery makers the cold shoulder by exempting them from state subsidies.
LG Chem provides electric batteries to global carmakers like General Motors, Ford and Chrysler as well as domestic carmaker Hyundai Motor. It expects sales of electric car batteries to reach 8 trillion won by 2020.
BY JIN EUN-SOO [email@example.com]
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