[Courtesy of LG Chem]
SEOUL -- LG Chem went ahead with a $2 billion investment to build a second battery plant in China despite a policy of excluding electric vehicles equipped with South Korean batteries from a list of eco-friendly cars eligible for subsidies.
LG Chem vice president Kim Jong Hyeon signed a deal with local government officials in Nanjing Tuesday on the construction of a second battery plant in the Binjiang development zone, company officials said, adding the second plant would start producing batteries in October next year.
LG Chem will gradually boost production at its plants in Nanjing as China is expected to revise its policy on subsidies for electric vehicles in 2020.
LG Chem's first battery plant in Nanjing opened in October 2015, but sales have been slow due to Beijing's decision to stop subsidizing electric vehicle manufacturers using parts from foreign manufacturers.
This year, China has eased trade and other restrictions imposed against South Korea in retaliation for the deployment of a U.S. missile shield, but there has been no change in its policy on EV subsidies.
LG Chem has established a stable supply network of raw materials. The company signed a deal with Huayou Cobalt, a major cobalt supplier in China, in April to jointly produce key materials for lithium-ion batteries, followed by a five-year contract with Nemaska Lithium of Canada in May to receive 7,000 tons of battery grade lithium hydroxide per year.
