Chairman Koo Bon-moo (8th from the left) of LG Group is shoveling at the groundbreaking ceremony for LG Chem’s Poland EV Battery plant project at Wroclaw, Poland. Seen on the right of Chairman Koo is Deputy Prime Minister Mateusz Morawiecki of Poland. (Photo: LG Chem)

LG Chem’s launch of an electric vehicle battery plant project in Poland is part of the company’s scheme to fortify the global No. 1 position in the EV battery market. LG Chem’s upcoming addition of the Polish plant to the current triple global production format connecting Korea, the United States and China will likely make it easier to make inroads into Europe, one of the world’s biggest EV markets, along with the United States and China.   

LG Chem’s three EV battery plants in Korea, the United States and China have churned out products to meet global automakers’ EV battery demand. 

Starting with Volvo in 2010, LG Chem has supplied EV batteries produced from the Korean plant to such European automaker clients as Daimler, Renault and Audi. Partly due to the so-called “diesel gate,” the supply of eco-friendly cars is growing fast. The Korean EV battery plant could not meet the rising demand, so the company opted to build a European plant. 

Once the Polish plant is dedicated, LG Chem will be the sole company among the global EV battery makers to have a production center in each of the three major markets China, Europe and North America. 

A report released by Merrill Lynch in July showed that China topped the global EV car market with a 51 percent share, followed by Europe with a 22 percent portion and the United States with 22 percent. 

The European EV battery market, which has fewer EV battery production centers, is projected to surge from the current 110,000 units to about 2.77 million units. 

Countries are scrambling to introduce subsidy systems. France subsidizes 10,000 euro (about 12.44 million won) toward the purchase of an EV car with the goal of supplying 2 million EV cars by 2020. 

The United Kingdom offers incentives equivalent to up to 35 percent of the price of buying EV cars, while Germany announced a plan in April to provide 1.2 billion euro in financial support to boost the EV car industry. This is the reason EV battery makers are hurrying to secure EV battery production centers in Europe. Samsung SDI is also seeking to set up an EV battery plant in Poland. With LG Chem’s launch of the Polish EV battery plant project, the Korean company will embark upon the EV battery business in a full-fledged manner, business sources said. LG Chem has so far won 83 projects from 29 global automakers. 

The company’s cumulative winning order amounts stand at 36 trillion won, but in reality, LG Chem earned 2 trillion won in sales. Since the mid-2000s when the company began to win orders, global mass production cases of EV cars have stood at about 40 cases. However, dozens of EV car brands are expected to hit the street from a combined 23 projects between the fourth quarter of this year and the end of next year. 

“Nearly half of EV cars that have been mass produced for the past decade will be released on the market in less than one year,” an LG Chem official said. 

LG Group Chairman’s Bids to Nurture Secondary Battery Business 

Looking back as far as 1991, LG Group Chairman Koo Bon-moo, then the group vice chairman, made a business trip to the United Kingdom Atomic Energy Authority in which he observed the production of a secondary battery. 

Recognizing that secondary batteries can be the group’s future growth engine, he brought a sample back to Korea and told his R&D staff to research secondary batteries. 

Fast forward two decades and LG Chem, a chemical unit of LG Group, has made a splash in the global rechargeable market. The company dedicated a plant capable of producing 50,000 units in Nanjing, China last October, which is emerging as the world’s largest secondary battery market. 

LG Chem set up a trilateral production format following the dedication of a plant in Ochang, Chungcheongbuk-do, in 2011 and another in Holland, Michigan, in 2012.

Capping the trilateral format by dedicating the latest plant in China, LG Chem has laid a solid groundwork to lead the global EV battery market. 

The Chinese plant has set up an integrated production system that can produce battery cells to modules and packs, which is tailored to meet customers’ demands in the center of China, emerging as the world’s largest EV market. 

“LG Chem has managed to survive thanks to its prospective and preceding changes,” said LG Chem Vice Chairman Park Jin-soo.