LG Chem announced on Oct. 4 that it has concluded a deal with German carmaker Volkswagen to supply electric vehicle batteries.
LG Chem plans to supply the batteries beginning at the end of 2019, the company said in a regulatory filing with the Financial Supervisory Service.
LG Chem kept the volume and prices of the batteries to be supplied a secret, saying they are fluid due to market conditions. Yet market watchers estimated the contract value at 13 trillion won (US$11.5 billion).
Currently, the company’s customers include General Motors, Volvo, Renault, and Korea’s Hyundai Motor Co. and Kia Motors Corp.
LG Chem operates electric vehicle battery plants in South Korea, China, the United States and Poland.
LG Chem has recently been putting efforts into securing hydroxide lithium and cobalt, which are major raw materials for batteries. LG Chem has also decided to establish a battery plant in Binjiang development district in Jiangsu Province. By 2023, the plant will have production capacity of 32 GWh per year.
"It seems that Korean and foreign battery manufacturers including LG Chem have started a race to expand production volume as demand for electrical vehicle batteries is expected to increase significantly," said an industry insider.