LG Chem is to build a factory for the production of lithium-ion batteries for electric vehicles in Nanjing, Jiangsu province, China.
Officials from the South Korean battery maker and Nanjing signed an agreement in Seoul, ahead of Chinese President Xi Jinping’s state visit to Korea.
LG Chem will establish the JV plant with two investment companies from Nanjing ― Nanjing Zijin Technology Incubation Special Park Construction Development and Nanjing New Industrial Investment Group.
The construction for the plant, in which LG will hold a 50% stake, will begin in September, and it will commence production of rechargeable batteries for some 100,000 EVs in China at the end of 2015.
The company said the JV plant will manufacture battery cells, modules and packs of cells for global automakers operating in China, which is expected to become the world’s largest EV manufacturing country.
LG Chem has secured orders to produce tens of thousands of batteries for Chinese hybrid EV makers such as Qoros and SAIC Motor.
LG Chem’s Nanjing plant seeks to achieve 1 trillion won ($990m) in sales by 2020.
The Korean company has a factory in Cheongju, North Chungcheong Province, with an annual production capacity of 200,000 EV batteries mostly for Korean and European customers. It also produces between 20,000 and 100,000 units for North American automakers in Holland, Michigan.