LG Chem Picked as Electric Car Battery Supplier for 2 U.S. Automakers

LG Group Chairman Koo meets with U.S. President Obama at a groundbreaking ceremony for CPI plant

LG Chem has become the lithium-ion polymer battery cell supplier for Ford’s electric car following a similar deal with GM. Now the Korean battery manufacturer is the battery cell supplier to two of the Big Three U.S. automakers.
Ford said on July 13 it selected Compact Power, Inc. (CPI), a wholly owned subsidiary of LG Chem, as the main supplier of lithium-ion battery packs for the 2011 Ford Focus Electric for the U.S. market. Earlier, General Motors picked LG Chem as the lithium-ion battery supplier for the Chevy Volt.
LG Chem will produce battery cells at its plant in Ochang, Chungcheongbuk-do, and CPI will assemble the cell and battery management system (BMS) in the form of a pack in Michigan, the United States, to be delivered to Ford. The Focus Electric, an electric car capable of running 100 miles on a single charge, will be produced at Ford’s Michigan plant.
A Ford official was quoted as saying that he was pleased with the announcement of LG Chem being chosen as Ford’s strategic partner and Ford will be aggressive to make Michigan a center of electric cars.
Meanwhile, LG Group Chairman Koo Bon-moo met with U.S. President Barack Obama at a ceremony to break ground for CPI’s Holland plant in Michigan on July 15. Obama delivered a speech in which he said the ground-breaking ceremony was designed to build the future of the United States.
President Obama’s participation in the groundbreaking ceremony may be construed as part of his strategic pitch for hybrid electric cars, one of the ways of resuscitating the ailing U.S. automobile industry. Last August, the U.S. administration financed $2.4 billion to GM, other automakers and part suppliers as money for implementing 48 projects related to hybrid electric cars.
LG Chem will pour an aggregate $300 million into the construction of the plant, which will begin to roll out electric car batteries in 2012. It will have an annual production capacity of battery cells for 200,000 hybrid electric vehicles. All the battery cells from the plant will be supplied to GM for the Chevy Volt. The state of Michigan financed $150 million for the construction of CPI’s Holland plant and decided to offer a tax cut of $130 million as part of the U.S. government’s efforts to support electric car manufacturing as a new business.
Obama has called for the production of electric cars as part of the clean energy policy, one of the four national tasks to be carried out by his administration since his inauguration.
Chairman Koo has been involved in investing in the battery business for almost 20 years. His company’s construction of the electric car battery plant in the United States, the world’s biggest automobile market, has gained LG Chem an opportunity to upgrade its global standing. The plant is believed to emerge as a global center to take up a 80 percent share in the global battery market. The U.S. plant is forecast to post 120 billion won in sales in the first year following its dedication and 300 billion own in sales in 2014. LG Chem has also signed MOUs or battery supply contracts with other companies in the United States, China and Europe, including Volvo. nw

U.S. President Barack Obama shakes hands with LG Group Chairman Koo Bon-moo at a ceremony to break ground for Compact Power, Inc.’s electric car battery plant in Holland, Michigan, on July 5 as LG Chem Vice Chairman & CEO Kim Bahn-suk looks on.