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| LG Chem Vice Chairman and CEO Shin Hak-cheol, right, shakes hands with GM Chairman and CEO Mary Barra at the GM Global Tech Center in Michigan, Thursday (local time), after signing a contract to set up an EV battery cell joint venture. / Courtesy of LG Chem |
By Jun Ji-hye
LG Chem will establish an electric vehicle (EV) battery cell joint venture with General Motors in a bid to accelerate its penetration into the rapidly growing U.S. EV market and increase overall sales of its battery segment, the Korean company said Friday.
LG Chem Vice Chairman and CEO Shin Hak-cheol signed a contract with GM Chairman and CEO Mary Barra at the GM Global Tech Center in Michigan, Thursday (local time), under which the two companies will set up the 50:50 joint venture and invest a total of 2.7 trillion won ($2.3 billion).
The two companies will begin construction of the EV battery cell manufacturing plant, which will have more than 30 gigawatt-hour output capacity, in Ohio in the middle of next year.
Battery cells produced at the Ohio plant will be supplied to GM's next-generation EVs.
"The joint venture marks the beginning of a great journey that will create an emission-free society and transform the global automotive market into an eco-friendly era," Shin said.
Through the joint venture, LG Chem will be able to secure a stable market to supply its battery products, while GM will get a stable supply of high-quality batteries, the Korean company said.
LG Chem, the nation's leading EV battery maker and chemical company, has maintained cooperative relations with GM for the last decade, having supplied its batteries to GM's flagship EV models such as Chevrolet Spark and Chevrolet Bolt.
"LG Chem's unrivaled strength in battery technology enables optimization of battery systems to maximize energy density, cost effectiveness and overall system reliability all at the same time," Shin said.
According to Mirae Asset Daewoo Research Center, the scale of the U.S. EV market will grow to 910,000 cars in 2021 and 1.32 million in 2023 from the 520,000 this year.
Since 2012, LG Chem has operated an EV battery plant in Holland, Michigan, securing 5 gigawatt-hour output capacity there.
The new battery plant to be built in Ohio will become the Korean firm's second production base in the United States.
The company said sales of its battery unit are expected to grow to $25 billion by 2024, with the firm's total sales expected to reach $50 billion.
Korean battery makers have actively sought to enhance their presence in global markets amid a global push for reducing emissions.
SK Innovation, the oil refining and battery making unit of SK Group, also announced Thursday that it has completed the construction of its first EV battery cell manufacturing plant in China in a bid to tap deeper into one of the major EV markets.
The new plant, dubbed BEST, is located in Changzhou, and has been established jointly by SK Innovation, Beijing Automotive Group and Beijing Electronics.
