Hyundai Motor Group, LG Chem and POSCO Group are reportedly discussing the establishment of an electric vehicle (EV) battery manufacturing joint venture.
LG Chem and Hyundai Motor have been discussing various ways to cooperate in establishing a battery joint venture since late last year. They are reportedly considering setting up a joint venture not only in Korea but in other countries.
"LG Chem is currently pushing forward with joint venture projects with several automakers, and Hyundai Motor Group is also aiming to sell one million units of electric vehicles by 2025. So the two companies share common interests,” said a battery industry insider.
LG Chem is promoting the establishment of an EV battery joint venture with General Motors (GM), following its deal with Geely, a Chinese carmaker.
POSCO is also expected to expand cooperation with LG Chem. Recently, POSCO Chemical signed a contract with LG Chem to supply battery materials worth 853.3 billion won. POSCO Group is focusing on battery materials as a future growth engine. It has merged POSCO Chemtech with POSCO ESM and changed the new company’s name to POSCO Chemical. It plans to increase its share of the global EV materials market to 20 percent by 2030.
Considering the interests of these companies, battery industry insiders say that they may invest trillions of won to establish a large-scale joint venture that operates at home and abroad.
These companies may promote the establishment of EV battery plants overseas as major countries want foreign vehicle and battery producers to locally manufacture EVs and batteries. Moreover, sales of Hyundai Motor Co. and Kia Motors Corp. break into 20 percent at home and 80 percent abroad.
In this connection, some media outlets recently reported that Hyundai Motor Co. and LG Chem would build a joint EV battery factory in Dangjin, Korea. The two companies said they are considering various ways of cooperation but nothing has been determined yet. “Automakers cannot depend solely on specific parts suppliers. It is the same with battery makers,” an industry analyst said. “But both sides admitted that they are studying cooperative measures.”