LG Chem will establish a joint venture factory for battery-cell production for electric vehicles with the U.S. auto giant General Motors. The two companies will construct a 30GWh-scale battery cell production plant for electric vehicles in the U.S. state of Ohio, and supply entire production from the plant for GM’s next-generation electronic cars. The deal comes as GM, which seeks to secure stable supply of EV batteries, and LG Chem, which must gain the upper hand in the fast-growing American EV market, share common interests.
LG Chem and GM exchanged a contract to establish the joint venture at the GM Global Tech Center in Michigan on Thursday. In attendance at the event were LG Chem Vice Chairman Shin Hak-cheol, and GM CEO Mary Barra. The two companies are set to invest 1 trillion won (approx. 840 million U.S. dollars) each to hold an equal stake in the new venture, and increase investments in phases. The cumulative total of their investment will amount to 2.7 trillion won (approx. 2.27 billion dollars). The two companies, which have also agreed to equally share the profit, plan to establish a cooperation system in the entire production process ranging from purchase of battery cell materials, to production of cells, and to installation on GM’s electric vehicles.
GM CEO Barra said that combining GM’s manufacturing expertise with LG Chem’s leading battery-cell technology will help accelerate pursuit of an all-electric future, adding that GM is looking forward to collaborating with LG Chem on future cell technologies that will continue to improve the value we deliver to their customers.
Through the joint venture, LG Chem has opened a beachhead to gain the upper hand in the fast growing American EV market. According to sources including the market survey firm Mirae Asset Daewoo Securities’ research center, the U.S. electric vehicle market will grow an annual average of 26 percent from 520,000 units this year to 910,000 in 2021, and 1.32 million in 2023.
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