LG Chem Gets U.S. Support

Company to get $150 mil. from U.S. government for its planned car battery plant in Detroit

LG Chem Co. has been picked to supply lithium polymer batteries to GM’s Buick SUV after it won the rights to supply the car battery to GM’s Chevrolet Volt early this year.
The U.S. government has also decided to provide financial support in the amount of $150 million to the company’s project to build a vehicle battery plant in the United States, which is being taken as a huge recognition of the Korean company’s superior technology for manufacturing quality batteries to power electric cars, the company said recently. In addition, the government of the state of Michigan has also decided to exempt $130 million worth of various taxes for the Korean car battery maker when it builds the car battery plant in Detroit and operates in the state.
The U.S. financial support of $150 million is equivalent to half of the total projected costs to build a car battery plant in the United States by LG Chem. The support will come from the U.S. government’s total $2.4 billion package of financial assistance to nurture the U.S. electric car industry, which also covers its support to cover the 48 projects planned by U.S. car parts makers.
A total of 100 car battery makers applied for the federal government money, but only nine of them were awarded support, which totaled $1.2 billion. LG Chem is the only foreign car battery maker given the U.S. government support, the company said, which is being taken as recognition of the superior quality of the lithium polymer battery produced by LG Chem.
The company, with the U.S. government support for the construction of the car battery plant in the U.S., feels it can now proceed with the project, as it will be much easier to sell its batteries in the U.S. market. In March, the company received notice from the Michigan State Government that it will exempt $130 million worth of state taxes on the company’s operations now that the company will build and operate a car battery plant in Detroit.
The company plans to invest a total of $300 million to build the car battery cell plant and will be able to supply the product for 250,000 battery-driven cars annually when it is online in 2012, employing 400 local people.
Vice Chairman Kim Ban-sok said the financial support from the U.S. government has boosted the brand power of the company’s car battery, which will help speed up the car battery plant project and solidify the company’s marketing operations not only in the U.S., but around the world.
He said the car battery plant in the United States will be a great help for the company to serve its North American customers.
GM Vice Chairman Tom Stevens said at a gathering in Traverse City that a plug-in SUV powered by an LG car battery will be put on the market in 2011. The SUV will be a Buick using some technologies that went into the Chevrolet Volt, which will be put on the market next year.
LG Chem has been able to strengthen its ties with GM with the right to supply its lithium polymer batteries for the Buick SUV, following the agreement to supply the battery to the Chevrolet Volt, the vice chairman said. “We have been put in a very good position to win increased rights to supply our car batteries to other GM cars,” the vice chairman said, adding that the company will not only supply battery cells, but also battery management systems and other products in a total package, winning GM’s recognition for its other manufacturing technologies related to manufacturing car batteries.
The company will start supplying the batteries from 2011 in full as its plant in Ochang, North Chungcheong Province, will produce cells and send them to the Detroit plant, which will make total CPI packs with the cells and supply them to GM. nw

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