LG Chem is strengthening its footing in China, the world’s largest electric car market, with its latest battery deal with Great Wall Motor, the country’s No. 1 manufacturer of sports utility vehicles.

The Korean battery-maker said Sunday it had inked a deal with Great Wall to supply its lithium-ion batteries for the carmaker’s upcoming plug-in hybrid SUVs, whose production will start from 2017.

In recent years, LG Chem has extended its partnership with Chinese carmakers, including Changan Automobile, China FAW Group and Shanghai Automotive.


With the latest deal with Great Wall, the company has secured a combined 200,000 unit orders in China, it said.

Since 2009, the Chinese government has made a big push for electric mobility. With 4 billion yuan ($640 million) being poured into the sector within the year, all electric vehicles will be exempted from acquisition tax until 2017.

Beijing is also working to build charging infrastructure for electric vehicles, with plans to replace more than 30 percent of new vehicles for public use with electric or other eco-friendly vehicles by 2016.

Research firm IHS predicted the Chinese market for eco-friendly vehicles to grow to 110,000 vehicles this year and 655,000 vehicles by 2020.

LG Chem, which currently operates two plants in Korea and the United States, is also beefing up its Chinese productions with a new plant due for completion in Nanjing, eastern China, this year.

The new plant, which is expected to start production from next year, will have an annual production capacity of 100,000 units.

“With the latest deal, LG Chem has secured the largest clientele among global battery-makers in the Chinese market,” said the company’s battery business chief Kwon Young-soo.

“We will be able to bolster our No. 1 position from 2016 when the electric car market gets on track for growth.”

By Lee Ji-yoon (jylee@heraldcorp.com)