LG Chem will be investing 436 billion won ($387 million) into LG Chem Wroclaw Energy sp. z o.o — the company’s fully owned Poland-based subsidiary — by June 2020, according to recent reports. This is for a battery factory that will be the largest EV battery factory in Europe.
Several outlets have reported that this means the South Korean firm has decided to double down on its plans for electric vehicle battery production in Poland — implying that demand growth for electric vehicles has picked up in Europe since the factory was announced last year — but digging in further seemed to indicate that the 436 billion won investment is not in addition to the initially estimated 400 billion won (1.3 billion złoty / $340 million). Rather, this ended up being the precise amount of money LG Chem intends to invest into this under-construction factory by 2020.
This factory is set to be the largest EV battery factory in Europe, so even increasing the investment by 36 billion won ($32 million) is a good sign that the EV market is looking bright to LG Chem. (Note: We’ve reached out to LG Chem for confirmation/clarification but are yet to hear back.)
Probably the most interesting thing about the news, though, is what Polish outlet Puls Biznesu discovered: “LG Chem has revealed it has orders for 36 trillion won of batteries for 82 projects made by 28 global automakers.” 82 projects? Wow.
Initially, the plan was to produce over 100,000 EV batteries a year at the new factory. That said, it’s not clear what size batteries those would be — small ones for plug-in hybrids or large ones like those in the upcoming Nissan LEAF and Renault ZOE.
Considering the moves made by various political figures in Europe as of late, and perhaps ignoring German Chancellor Angela Merkel’s support for the continued use and sale of diesel and petrol cars for the foreseeable future, this news shouldn’t be too surprising. LG Chem seems to be aware of the fact that the winds are shifting and new money making opportunities are fast arising.
The Korea Herald provides more information: “LG Chem said the investment is aimed at expanding the unit’s output capacity. LG Chem entered the EV battery business in 2009. The company has supplied batteries to global carmakers, such as Audi and Renault-Nissan, as well as others. It currently operates EV battery plants in China, the United States, and South Korea. In 2015, LG Chem started the operation of its new EV battery plant in China, eyeing growing demand on the back of Beijing’s plans to tackle air pollution by introducing more eco-friendly cars.”
It seems that the company is rather well placed to take advantage of the predicted boom in electric vehicle sales then, no?