|LG Chem researchers check the firm's battery for electric vehicles at its plant in Ochang, North Chungcheong Province. / Courtesy of LG Chem|
By Jun Ji-hye
LG Chem has signed a long-term battery supply deal with Swedish carmaker Volvo. The European company is launching electric vehicle (EV) models under Volvo and its sub-brand Polestar, the nation's leading battery and chemical company said Wednesday.
Under the deal, LG Chem will supply lithium-ion batteries over the coming decade for next-generation Volvo and Polestar models.
The Korean firm did not disclose details of the supply deal, citing confidentiality.
In 2017, Volvo Car Group announced a plan to transform itself into an EV maker, saying, "Every new Volvo car launched from 2019 onwards will be powered by electricity."
The Swedish carmaker also said EVs will make up 50 percent of its total sales by the end of 2025.
Since the announcement of the plan, eyes have been on which companies will be selected as EV battery suppliers for the project.
Commenting on the multi-billion dollar battery supply deal, Volvo said LG Chem is a renowned battery manufacturer that has a long and successful track record of supplying lithium-ion batteries to the global automotive industry.
The Korean battery maker's technology, supply chains and competitive costs met Volvo Cars' strict sourcing guidelines, it said.
LG Chem said taking the latest contract as an opportunity, it will enhance its cooperation with Volvo Car Group and solidify its leading position in the EV battery area.
As an increasing number of global carmakers are moving to develop future EVs through their own module platforms, LG Chem will be able to win further EV battery deals, the firm said.
LG Chem has already signed a massive battery contract with German automaker Volkswagen for the latter's modular electric drive matrix-based EVs.
"The latest contract is a significant achievement for us, resulting from our consistent investments in R&D for about 30 years since the early 1990s," an LG Chem official said. "We will continue to solidify our position as a leader in the battery market."
Along with LG Chem, CATL of China has been selected as one of the two EV battery suppliers for Volvo.
"With today's agreement, we effectively secured our battery supply for the upcoming decade," said Martina Buchhauser, senior vice president for procurement at Volvo Cars. "By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward."