Volkswagen's diesel emission scandal is showing no signs of a letup, even whacking other automakers, but there is one bright point: electric vehicle battery makers.
South Korean EV battery makers led by LG Chem Ltd. are poised to benefit from the diesel emission fiasco as demand for vehicles powered by non-fossil fuels is expected to rise down the road, according to analysts Wednesday.
"It is highly likely that the Volkswagen case is prodding authorities to take a look at other diesel vehicles," said Yoon Hyuck-jin, an analyst at Eugine Investment & Securities. "The case will help boost demand for eco-friendly cars such as electric vehicles."
In the first seven months of the year, a total of 241,000 EVs were sold around the globe, sharply up 47 percent from a year earlier, according to the brokerage house.
Yoon expects LG Chem and Samsung SDI Co. to benefit most from an expected expansion in the global EV market.
LG Chem has inked deals to supply EV batteries to global automakers such as GM, Renault, Volvo and 18 others, and is expanding its presence in China.
Recently, LG Chem has been chosen as an EV battery supplier to Chery Automobile Co. It follows a similar deal with China's No. 1 automaker, Changan Automobile Co.
LG Chem has already signed deals to supply EV batteries to Great Wall Motor Co. and Dongfeng Motor Corp. -- China's No. 2 and No. 3 automakers, respectively.
Samsung SDI, LG Chem's local rival, is also supplying EV batteries to BMW, Ford and other global automakers.
The EV battery market is expected to grow to an estimated $18.24 billion by 2020, according to B3, a Japanese market research firm specializing in lithium-ion batteries.
Fueled by such rosy optimism, local EV battery makers skyrocketed. LG Chem surged 6.93 percent to close at 285,500 won, while Samsung SDI soared 1.02 percent to end at 108,500 won. The broader KOSPI advanced 1.02 percent. (Yonhap)