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LG Chem to expand distribution: report
Battery manufacturer LG Chem looking to expand joint venture partnerships
23 Oct 2020
KOREAN chemical company and vehicle battery manufacturer LG Chem has signalled its intention to expand the number of joint ventures with car manufacturers, according to Reuters.
LG Chem CEO Hak Cheol Shin told Reuters that the company is in discussions with a “couple” of car-makers that would see it produce batteries for hybrid and full-electric vehicles.
“Our joint ventures with Geely and GM have been already announced, and we have ongoing discussions with a couple of other auto-makers,” he said.
Mr Shin would not be drawn on which car-makers the battery giant is talking with, refusing to elaborate on the topic.
LG Chem currently has a number of joint ventures as mentioned above, with General Motors and Geely, the former of which was announced in December 2019 as a $US2.3 billion ($A3.24b) tie-up to produce low-cost batteries.
The partnership also aims to reduce manufacturing costs to industry-leading levels, and will be produced in GM’s factory in Lordstown, Ohio.
Employing 1100 workers, the new plant is expected to be as large as Tesla’s Gigafactory 1 in Nevada.
GMC’s new-generation Hummer EV will be produced with the joint-venture batteries, which will give the reborn pick-up 746kW of power and over 550km of expected range.
The Cadillac Lyriq luxury SUV will also be underpinned by the joint-venture batteries.
Its partnership with Geely was formalised in June last year, with a $US188 million ($A264m) deal that would oversee the production of a range of new-energy vehicles.
Geely used the joint venture to strengthen its newly created Geometry EV sub-brand, designed to help increase its share in the Chinese EV market, which in 2018 reached a total of 1.25 million sales.
LG Chem also supplies batteries for Tesla Model 3 vehicles manufactured at Telsa’s plant in Shanghai.
As for who the brand is in talks with, it is anyone’s guess, with most manufacturers moving towards a model of increased EV production and rollout.
One possibility that would fit neatly is compatriot Hyundai Motor Group, whose sub-brands Kia and Hyundai are in the process of electrifying their model line-ups over the coming years, particularly Hyundai who has been leading the charge in Australia with regard to new-energy vehicles.
Another option is the Volkswagen Group, which has previously sourced batteries from a range of manufacturers including LG Chem, however given it serves a range of brands including Volkswagen, Skoda, Audi, Porsche, Bentley and Seat, a more substantial partnership may be required.
According to Reuters, LG Chem is looking to build a new factory in Europe as it plans to more than double its combined battery production capacity from 120 gigawatt hours in 2020 to 260 gigawatt hours by 2023.
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