LG Chem's US factory reopens

LG Chem’s battery plant in Holland, Mich. / Courtesy of LG Chem

By Kim Yoo-chul

LG Chem, the world’s top manufacturer of lithium-ion batteries, said Monday it will begin production of batteries for electric vehicles in its idle U.S. plant in Holland, Michigan from July.

The company said the firm plans to start commercial production after running a pilot project and upon receiving customer approval.

It aims to ship 6,000 battery packs to General Motors to be used in the latter’s Chevy Volt-branded electric vehicles from September.

“LG Chem will resume the operation of one of our three battery lines at the plant. After a two-month trial production, we will ship finished goods to GM,” said Song Choong-sup, a spokesman of the Seoul-based outfit.

LG Group’s battery making-affiliate also said that it may start production on the two other lines by the end of September 2015 but progress will depend on the market situation.

Song said the normalization of its key U.S. factory will help it strike more deals with either existing or new clients, although the spokesman declined to elaborate further.

“LG Chem will put more focus on increasing production, as from next year we expect to win more deals,” Song added.

LG Chem Michigan has yet to produce a battery for vehicle use, even after receiving most of a $150 million American Recovery and Reinvestment Act grant.

That budget was initially supposed to help LG Chem Michigan construct a $304 million manufacturing plant to produce enough battery cells for 60,000 electric vehicles each year, including GM’s extended-range plug-in hybrid Chevrolet Volt and Ford Motor’s all-electric Focus.

However, due to unexpected sluggish demand for electric vehicles, production at the plant fell behind schedule, according to company officials.

The resumption of business comes after the sale of electric cars rose by 20 percent during the first three months of the year, the statement said.

LG remains bullish about its outlook for the energy storage solutions (ESS) market thanks to governments’ shift towards eco-friendly business projects.

“LG Chem is ideally positioned to save costs in logistics from operating the Michigan factory. We will use it as a base to boost our leverage in the lucrative ESS market,” the spokesman added.

LG Chem supplies car batteries to 10 global automakers, as well as offering ESS solutions to 10 major clients including ABB, SCE to IBC Solar.