LG Chem Ltd., South Korea's leading chemical company, said Friday it will establish a 50:50 joint venture with General Motors to build a battery cell assembly plant in the world's most important automobile market amid a global push for zero emissions.
LG Chem and GM said they will invest up to a total of $2.3 billion through the joint venture company.
The joint venture will set up a battery cell assembly plant in the Lordstown area of northeast Ohio. Groundbreaking is expected to take place in mid-2020.
Battery cells to be produced at the plant will be supplied to GM's battery-electric vehicles, according to LG Chem.
The plant's annual production capacity will reach more than 30 gigawatt hours, which is enough to supply batteries for 500,000 electric vehicles.
LG Chem Vice Chairman and CEO Shin Hak-cheol said the joint venture is more than just a mere collaboration.
"It marks the beginning of a great journey that will create an emission-free society and transform the global automotive market into an eco-friendly era," Shin said in a ceremony at the GM Global Tech Center in Michigan, according to the company.
The EV battery market has been on a roll as automakers around the world race to go electric and eco-friendly due to tightened regulations on greenhouse gas emissions, which scientists say are to blame for global warming.
GM Chairman and CEO Mary Barra said that GM looks forward to collaborating with LG Chem on future cell technologies.
"Combining our manufacturing expertise with LG Chem's leading battery-cell technology will help accelerate our pursuit of an all-electric future. That will continue to improve the value we deliver to our customers," Barra said in comments posted on the company's website.
The latest investment could help strengthen LG Chem's position as a global market leader in the EV battery sector.
An electric vehicle equipped with LG Chem batteries can travel about 380 kilometers on a single charge, according to LG Chem.
LG Chem has supplied batteries to more than 2.7 million electric vehicles, including those of GM, Ford, Renault, Volvo, Audi, Volkswagen and Dailmer, as well as South Korea's largest carmaker, Hyundai Motor Co., and its smaller affiliate, Kia Motors Corp.
Shin said LG Chem would have a combined global capacity of 70 GWh by the end of the year and 100 GWh global capacity by 2020.
LG Chem has another electric vehicle battery plant in Michigan.
It also operates electric vehicle battery plants in China, Poland and South Korea.
Shares in LG Chem rose 0.34 percent to 294,500 won ($248) on the Seoul bourse, underperforming the broader KOSPI's 1.02 percent gain. (Yonhap)