LG Chem Signs MOU to Build China EV Battery Plant
South Korea's LG Chem has signed a memorandum of understanding to build a factory for electric vehicle batteries in China by 2015, betting on growing demand in the world's top car market.
The factory in Nanjing will break ground in September and will cater to Chinese automakers such as SAIC Motor Corp and global firms such as General Motors.
Chinese state-owned corporations, among them Nanjing Zijin Technology Incubation Special Park Construction Development and Nanjing New Industrial Investment Group are expected to partner with LG Chem to build the facility, which LG said would cost hundreds of millions of dollars and generate combined sales of 1 trillion won ($989.90 million) by 2020.
The South Korean firm is hoping China will reinvigorate sales of electric vehicles, which so far have failed to live up to their initial hype.
Automakers are rushing to introduce new electric vehicles in China, encouraged by government plans to put 500,000 EVs on the road by 2015 and 5 million by 2020.
LG Chem currently has a factory in Nanjing producing small batteries and displays for smartphones and other mobile devices. It also operates EV battery factories in Korea and the United States.