Chairman Mary Barra of General Motors and Vice Chairman Shin Hak-cheol of LG Chem sign a j.v. agreement on the EV battery production on Dec. 5 at the GM Global Technical Center in Michigan.

LG Chem has joined forces with GM, one of the biggest automakers in the United States, to leverage the EV battery market.

LG Chem struck a contact on the establishment of a EV battery joint-venture at the GM Global Center in Michigan on Dec. 5 with GM CEO Mary T. Barra and LG Chem Chairman Shin Hak-cheol in attendance.
The two companies agreed to split the ownership of the joint venture.

They announced a plan calling for each company to invest 1 trillion won for the establishment of a j.v. entity – for a combined 2.7 trillion won on stages with the goal of securing 30GWh in EV battery capability.

The figure means an equivalent to a capability of supplying batteries for 500,000 electric vehicle units, each driving 380 km per charging. The LG Chem-Gm joint-venture is expected to be the biggest investment project among Korean battery makers and foreign automakers.

Construction of a joint EV battery plant in a former GM plant site in Lordstown, Ohio, is to begin in mid-next year, and the plant is expected to be dedicated in time for the release of GM’s next-generation EVs. GM CEO Barra said the GM-LG Chem collaboration was expected to accelerate the transition to an EV era.

The establishment of the EV battery joint-venture came as GM, preparing for a shift to the EV production, was on the same wavelength with LG Chem, which wanted to secure a vintage point in the rising EV battery market.

According to a report by the market survey institution Mirae Asset Daewoo Research Center, the U.S> EV market is predicted to surge from 520,000 units this year to 710,000 units in 2020 and 1.32 million units in 20-33 with an annual average growth rate of 26 percent.

Under the deal, GM will be allowed to secure a stable supply of batteries for next-generation EVs whereas LG Chem will be able to minimize risks stemming from massive investments.

In 2009, LG Chem, one of the world’s leading lithium-ion battery makers, became the sole supplier of batteries for GM’s Chevrolet Bolt, the world’s first mass production EV car.

The Korean battery maker has since supplied to GM’s EVs such as Chevrolet Spark. LG Chem now has an EV battery plant in Holland, Michigan, with a current capacity of about 5GW whose operation started in 2012.

A view of LG Chem’s EV battery plant in Holland, Michigan. (Photos: LG Chem)

The upcoming joint-venture EV plant will bring the number of LG Chem’s production centers around the world to seven, including five own plants in the United States, Europe, China and Korea and two joint-venture plants, which will allow the Korean EV battery maker to secure a foothold to raise its global market share.

LG Chairman Shin said, “A great journey to explore the U.S. eco-friendly EV era has been launched right now, and LG Chem will devote itself to making the establishment of a joint-venture with GM a historic success.”

LG Chem aims to rise to the world’s No. 1 position in the global EV battery market by securing an EV battery production capacity of 300GWh in the United States, the world’s biggest automobile market.

LG Chem has so far supplied batteries for more than 2.7 million EV units, but accidents involving batteries has never occurred, Shin said.

He stressed willingness to ramp up a global leadership as globally technology solution provider, saying that the expertise related to the manufacturing and process LG Chem has accumulated in the course of producing batteries is a “precious asset unmatched by anyone else.”