LG Chem invests W2.1 tril. to build 2nd EV battery plant in China
LG Chem Vice Chairman and CEO Park Jin-soo, third from right, applauds during a groundbreaking ceremony, Tuesday, for the firm's second electric vehicle battery plant to be built in Nanjing in southeastern China. / Courtesy of LG Chem
By Jun Ji-hye
LG Chem will invest 2.1 trillion won ($1.8 billion) by 2023 to build its second plant in China to manufacture electric vehicle (EV) batteries in a bid to amplify its production capacity to meet growing global demand, the company said Tuesday.
The nation's leading battery and chemical company held a groundbreaking ceremony for its second plant to be built in Nanjing in southeastern China.
The three-story plant will be built on the 198,300-square-meter site and is aimed at producing high-performance batteries that can annually power more than 500,000 EVs, which can each travel about 320 kilometers on a single charge.
The first phase of production will begin late next year.
“We will deploy advanced technology and equipment in the second plant in Nanjing so it can become the world's best plant capable of responding to rapidly growing global demand for EV batteries,” LG Chem Vice Chairman and CEO Park Jin-soo said.
The company said it considered geopolitical factors when selecting Nanjing as the location for its second plant.
The firm is already operating the first plant in an area close to Nanjing to produce small batteries, meaning the two plants can create a synergy effect, it said.
The location will also make it easier for the company to receive raw materials as it is about 180 kilometers from the site of a joint venture it set up with Huayou Cobalt, a major cobalt supplier in China.
In April, LG Chem announced a decision to invest 239.4 billion won to form two separate joint ventures with the Chinese firm in a bid to ensure a stable supply of cobalt, a key material in making EV batteries.
Once the construction is completed, the company will have five battery plants in Korea, China, Europe and the United States.
The company said it will utilize each plant's strategic position to expand in the global market.
According to market research firm SNE Research, the EV market will grow to 6.1 million in 2019 and 22 million in 2025, accounting for 21 percent of total vehicle sales.