LG Chem CEO Kim Bahn-suk |
By Kim Yoo-chul
Staff Reporter
Eco-friendliness is the auto industry's new theme.
Driving it forward are batteries that are emerging as a new power source for hybrid or electric cars, replacing gasoline engines.
It has spawned a big market from which almost everyone wants a piece.
LG Chem is looking to strike a big deal to supply batteries to General Motors. Samsung is trying to kick-start an effort to overtake its rival. The global battery market is worth $36 billion and is expected to surpass $50 billion in five years.
Samsung SDI CEO
Kim Soon-taek |
Samsung SDI, an affiliate, said that it will acquire U.S. battery maker Cobasys through a joint venture with Germany's Robert Bosch ― SB LiMotive
"SB LiMotive would benefit from Cobasys's hybrid-car battery-related original technologies," SDI spokesman Seo Hae-su said Wednesday.
Cobasys, which develops, and manufacturers energy storage-related systems for hybrid-car vehicles, is owned by units of Energy Conversion Devices and Chevron. The company employs some 300 people in Michigan and Ohio.
The deal comes amid signs of a turnaround in the quarterly profits of Samsung SDI on the back of buoyant moves in its battery business. Samsung SDI will release its second quarter earnings report on July 21.
"Manufacturers should reduce the lithium-ion battery's weight and price considerably. SDI's recent decision clarifies its intention to loosen LG Chem's battery leadership," said an analyst at Prudential Investment.
In terms of market perspectives, increasing urbanization is one of the reasons why electrification makes sense. By 2015, more than 70 cities worldwide will have populations of more than 5 million ― almost twice as many as in 1995 ― according to research firms.
"These mega-cities will make the limited battery-powered cars' range acceptable," Seo said.
As consumers are stung by higher fuel prices globally, the company will undoubtedly witness growing demand for electric car batteries in the future, an LG Chem official said. LG Chem is looking for sales in excess of 2 trillion won.
yckim@koreatimes.co.kr
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