LG Chem opens largest electric-car battery plant

LG Chem has completed the world’s largest electric-car battery plant, which is capable of powering 100,000 vehicles per year.

The affiliate of LG Group also said that it will be the world’s No. 1 car battery maker by 2015.

``Japan leads the way in patents and materials but Korea is ahead in lithium-ion batteries. LG Chem is leading the way,’’ said CEO Kim Bahn-suk during a ceremony to mark the completion of the Ochang facility.

President Lee Myung-bak, GM Vice Chairman Stephen J. Girsky and LG Group Chairman Koo Bon-moo were among those on hand to celebrate.

The LG Chem CEO is playing a leading role in guiding LG Chem’s battery business through strategic alliances with top carmakers.

Kim is one of top performers in the LG stable of affiliates under the control of group Chairman Koo Bon-moo.

He has played a key role in winning a major deal to provide Volt vehicles of General Motors (GM) with batteries.

``LG Chem is planning to build a second overseas plant in Nanjing, China, to mainly produce medium- and large-size lithium-ion batteries for electric cars amid higher demand,’’ Kim told reporters.

LG has already been operating a lithium-ion battery line for smaller electronic gadgets, while it is set to start the operation of its first U.S. plant in Michigan from next year.

``Consumers are paying more attention to electric cars. GM will sell more than 30,000 of the Volt electric vehicles, which is more than its previous target,’’ Kim said.

For battery-makers such as LG Chem, securing more automakers as clients is crucial to guarantee business sustainability and LG Chem is quite safe at least in terms of customer channels.

``LG Chem is seen to strike another battery supplement deal in Japan. Chances are quite high, though we can’t unveil the name of our new Japanese battery partners,’’ said the CEO.

LG has already secured 10 carmakers as battery clients including Ford Motor, Hyundai Motor, Kia Motors and Renault, as well as GM.

``Among the 10, no Japanese companies are included,’’ Kim said at the conference.

LG Chem has doubled its investment plan for batteries to 2 trillion won by 2013 and also raised its 2015 sales target for electric car batteries to 4 trillion won.

The investment could enable LG to boost production capacity to over 350,000 batteries from an estimated 100,000 this year. LG is also aiming to control 25 percent of the global demand for electric car batteries, it said in a statement.

The CEO reiterated the strongest-ever partnership with GM and said GM is ordering more batteries for its hybrid electric cars.

``LG Chem will lead the global electric car market with GM. The partnership is very solid,’’ said the CEO, adding GM sold 1,000 Volts during the first quarter of this year.

``LG Chem will build a third local battery facility in 2013 for more output amid the bullish market. We’ve already secured the land. The annual capacity will be the same as the latest one,’’ Kim told reporters.

``We at GM will do our part to support this effort by continuing to invest in our design, engineering and manufacturing facilities in Korea. In fact, GM plans to invest a total of about 4.8 trillion won or $4.27 billion, here, over the next three years,’’ the GM vice chairman said in the congratulatory message.

The top-level GM executive said his firm has launched a demonstration project with LG to explore the acceptance of battery electric vehicles in South Korea.

``This project involves a fleet of electric vehicles based on the highly successful Chevrolet Cruze that are powered by LG Chem batteries,’’ he said.

The so-called ``biggest automotive revolution’’ since automobiles first rumbled along rutted roads is probably not about to take off.

That’s because the mainstream plug-in electric vehicles in almost a century will be flooding the streets within the next few years and the vehicles are eerily quiet as they are tailpipe-emission free, according to experts and analysts.

South Korea, which is competing with the United States and Japan, as well as China for position in the booming market, plans to make the nation a top-tier country with fine-tuned technologies for green cars.

By 2015, Korea plans to export 1 million electric cars, while it is set to produce 1.4 million such vehicles, according to the government.

Seoul has also allocated 1.4 trillion won as a budget for R&D investment as part of the government’s initiatives to get more patented technologies in the sector.

``Now, electric vehicles are optional however the vehicles should become the car industry’s mainstream, someday,’’ said President Lee Myung-bak at the opening of the new facility.