LG Chem has signed a deal with a Chinese carmaker to supply electric vehicle (EV) batteries, securing a stronger grip on the world’s largest EV battery market.
The world’s leading maker of batteries for EVs said Thursday that it will start supplying state-owned Chery Automobiles from the end of this year.
“The latest deal is expected to result in sales of hundreds of billions of won,” an LG Chem spokesman said. “We will supply our EV batteries for thousands of vehicles for the company.”
LG Chem said the contract meant the company has secured a leading position in the market because it supplies EV batteries for more than half of China’s automobile companies, including joint corporations there.
The contract comes a month after the company signed an EV battery deal with Changan, one of China’s largest automobile makers. LG Chem’s top clients include SAIC and Dongfeng, among the “Big Four” of Chinese carmakers.
The company said it expects to expand its presence there, boosted by the Chinese government’s New Energy Autos policy, which extends support for environmentally friendly vehicles to cut air pollution.
The policy stipulates that more than 30 percent of cars used in government and public sectors should be replaced by eco-friendly ones by 2016.
“The latest deal has led LG Chem to gain a strong edge to lead the world’s largest electric vehicles market,” LG Chem battery business head Kwon Young-soo said. “We will be an unchallenged leader in the electric vehicles market by obtaining more orders from all around the world.”
The market for eco-friendly vehicles in China will exceed 110,000 electric cars this year, with the number surging to 655,000 by 2020, according to market researcher IHS.