LG Chem staff check a battery pack at the company's battery-manufacturing plant in Ochang, Sunday. / Courtesy of LG Chem
Koreatimes.co.kr: LG Chem has signed a deal with Great Wall Motor to supply batteries for the automaker's new range of electric vehicles (EVs) to be launched in 2017.
Great Wall Motor is China's largest producer of sports utility vehicles (SUV).
Under the agreement, announced Sunday, LG Chem will provide more than 200,000 batteries only on the mainland. LG believes the deal will enable it to hold a dominant position in China.
The company expects demand for SUV EVs in China to reach 6.2 million by 2016, up 20 percent from 4.1 million SUVs last year.
Spokesman C. S. Song said LG had also signed a deal with another major car manufacturer in China.
The electric vehicle industry in China has been growing rapidly, with increased government subsidies.
In 2009, Beijing approved an auto industry restructuring and revitalization plan to invest $1.5 billion in electric vehicles.
The government announced last year that it would waive a 10 percent purchase tax on electric cars in a bid to combat pollution and cut energy dependence.
New-energy vehicles ― China's term for electric cars, plug-in hybrids and fuel-cell vehicles ― are excluded from the levy from 2014 to the end of 2017. The government will set up a battery charging system major cities, and replace 30 percent of government cars with eco-friendly vehicles.
Market research company IHS expects the number of electric vehicles in China to grow to 655,000 by 2020 with the government taking up 30 percent of this.
In line with China's latest attempt to spur demand for electric vehicles, LG Chem has set up a battery plant there.
"LG Chem will be a top global top company in the EV battery market, which is expected to grow rapidly after 2016," said LG Chem President Kwon Young-soo.
