South Korea's LG Chem is posed to expand its electric vehicle (EV) battery business in Poland, less than a year after opening its factory there.
LG Chem's board of directors today approved investment of $571mn in LG Chem Wroclaw Energy to fund the expansion. The project will run from next month to April 2021, and it may triple the unit's output capacity in Poland to 300,000 EV batteries annually from the current 100,000. LG did not say whether the new production lines will be built at its existing factory near Wroclaw or on a separate site.
The latest investment will exceed the amount that LG Chem spent to build its Polish plant by about 63pc. The current factory, which opened earlier this year, is located in Kobierzyce, about 20km southwest of Wroclaw. LG Chem's decision to expand so quickly comes after the company last month signed a contract to supply EV batteries to German automaker Volkswagen.
LG Chem joined its South Korean rivals, SK Innovation and Samsung SDI, in signing supply deals with Volkswagen. The automaker plans to introduce 50 new electric-only models under its various nameplates by 2025, aiming by that year to sell more than 1mn units annually under the Volkswagen brand alone.
SK Innovation earlier this week approved investment of 1.4 trillion won ($1.24bn) to build an EV battery plant near Atlanta that will supply Volkswagen vehicles in North America. All three major South Korean battery producers are following a strategy of setting up large production centres in their home country, China, central Europe and the US to capitalise on rising global demand.
There were 3.1mn EVs in use globally last year, up 54pc from 2016's level, with the IEA forecasting this to rise to about 125mn by 2030.
