Stronger Grip on Car Battery Market

LG Chem breaks ground for 1 tln-won lithium-ion battery plant for hybrid cars

"LG Chem will be the top maker of batteries for hybrid cars by 2015," said Vice Chairman Kim Bahn-suk at a groundbreaking ceremony for a new battery plant exclusively for auto battery production in the Ochang Techno Park inside the Ochang Industrial Complex in Ochang, North Chungcheong Province on May 10.
The new plant will be able to produce lithium-ion car batteries when the first stage of the plant is completed in the first half of next year and supply the batteries to GM and Hyundai Motor. LG Chem will invest 1 trillion won to build the plant, which will create some 3,000 jobs and create production effects totaling 4 trillion won when it goes on line.
In January, GM picked LG Chem as a supplier of the lithium-ion batteries for the Chevrolet Volt plug-in electric car. Recently, the U.S. automaker reaffirmed that its original schedule to produce the car will be kept, despite filing for bankruptcy protection. The company has been producing the batteries to power electric cars at its plant in Ochang, which will be supplied to Hyundai Motor's LPI Hybrid Avante and Kia Motors LPG hybrid Forte, which are to be unveiled next month and in the fall respectively.
Minister Lee Youn-ho of the Ministry of Knowledge Economy said at the ceremony that the government aims to grow the green car industry to be one of the world's "big four" by the mid 2010s. "I believe LG Chem will be a valuable partner for us," the minister said.
"The future of the electric car battery will also decide the future of not only the global auto industry, but also the energy industry in a larger sense," said the minister.
Vice Chairman Kim said the high-powered car battery is an environmentally friendly energy source and will be a core technology for futuristic environmentally friendly cars and also the nucleus of the industrial facilities that will represent national competitive power. He said the company is ready to focus on the development of new technologies as a given mission of fulfilling national causes.
The vice chairman's speech shows the company's burning desire to be the first mover in the electric car battery industry, not a follower. The company projects sales of the batteries to amount to 2 trillion won in 2015 with the world market for auto batteries to account for around 20 percent of sales.
The growth of the hybrid car battery market has a bright future. Projections see the number of hybrid cars in the world expanding to 3.3 million units in 2013 from the current 900,000 units, and to 4.6 million units in 2015. The market for car batteries is projected to rise to more than 10 trillion won in 2015.
LG Chem started the production of small lithium-ion batteries en masse in 1988, earlier than any other company, but lagged behind Japanese companies by more than 10 years. But the large lithium-ion batteries to power cars is a different story. The company set up a subsidiary in the United States in 2001 at the same time its Japanese rivals did. But the company is having more success in the business than the Japanese.
The company has been picked as the supplier of the lithium-ion battery for the LPI Hybrid Avante to be produced by Hyundai Motor. The automaker worked on the development of the car for six years and is scheduled to mass produce the new Hybrid sedan beginning in July.
In addition, LG Chem will start supplying the battery to GM's Chevrolet Volt in September when the hybrid car is mass produced under an exclusive supplier agreement signed in January with GM.
LG Chem's lithium-ion battery is proven to be 50 percent more powerful than the nickel-hydrogen battery produced by a Japanese maker.
Officials of the company said the groundbreaking of the new plant will show that the company is ahead of its rivals in the production of lithium batteries in terms of not only technology, but also production, strengthening its grip as the leader in the industry.
The company has been producing the lithium batteries at its plant in the Ochang Techno Park with an annual production capacity of 1 million cells as a result of continued research on technology to mass produce the battery. nw

Dignitaries at the groundbreaking ceremony for LG Chem's new car batteries plant in Ochang Techno Park in Ochang, North Chungcheong Province on May 10. Included among them are LG Group Chairman Koo Bon-moo, 2nd R, Minister Lee Youn-ho of the Ministry of Knowledge Economy, 3rd R, and Vice Chairman Kim Bahn-suk, 3rd L.