LG Chem Extends Its Battery Reach Into Chinese Hybrid Market

LG Chem Battery Pack For the Chevy Volt









South Korean battery developer LG Chem, seeking to become a world leader in energy storage for electric-drive cars and trucks, said it has signed a deal to begin supplying advanced lithium-ion batteries to China's Changan Automobile later this year.

Neither the value of the contract nor the number of batteries to be sold were disclosed.

Analysts at IHS Global Insight suggested that the deal might cover batteries for the Zhixiang EV that Changan - one of China's largest home-grown automakers - is expected to begin selling in China by the end of the year.

A report in the Korea Times, however, says Changan - which already sells one hybrid and is expected to introduce a second model in March - is moving away from nickle-metal hydride batteries in the gas-electric cars and that it wants LG Chem's lithium batteries for those and future hybrids as well.

Lithium batteries are smaller, lighter and more energy-dense than nickle-metal hydride, but also require more complex heat management stems to ensure longterm reliability.

LG Chem, which also supplies lithium-ion batteries to General Motors Corp. and Korean auto giant Hyundai Motors, has made no secret of its desire to dominate the advanced auto battery market. It reportedly is also in talks to supply Ford Motor Company.

The company recently announced plans to build new battery factories in South Korea and in the U.S.

The Changan deal is LG's first battery supply contract in China and also involves ongoing joint R&D on electric vehicle and hybrid batteries..

Advanced batteries represent a nearly $2 billion global market today but are expected to become a nearly $9 billion market by 23015 as demand grows with increased production of conventional and plug-in hybrids and rechargeable all-electric cars and trucks.

Source: Edmunds.com