South Korea’s LG Chem is setting up a joint electric vehicle batteries business with Chinese carmaker Zhejiang Geely Holding Group.
Each company has invested around US$94 million in the 50-50 joint venture, which, by the end of 2021, will produce 10GWh of EV batteries annually for the Chinese market.
LG Chem president Kim Jong-hyun (pictured right in front row) signed an agreement with Geely vice-chairman Feng Qingfeng (left) to set up the joint venture. However, LG Chem said the name of the new business and details of the future factory site will be announced later.
LG Chem said the deal would help the company expand in the Chinese EV battery market while Geely would benefit from having access to “high quality batteries”.
Meanwhile, LG Chem said it would keep its cooperation with Chinese car firms and battery makers under constant review “to advance in the Chinese market”.
Geely plans to derive 90% of its revenue from EVs by 2020, LG Chem said. Geely said it sold 1.5 million vehicles overall in China in 2018— more than all other domestic carmakers.
In 2018, Geely confirmed it had bought a 9.69% stake in Daimler to become the largest single shareholder of the German company.
Also last year, LG Chem announced plans to build its second battery production plant in Nanjing, eastern China, to reportedly make batteries for 100,000 new energy vehicles annually.