LG Chem to supply hybrid batteries to Changan Auto

LG Chem Ltd., South Korea's biggest chemicals maker, will supply hybrid-car batteries to China-based Chongqing Changan Automobile Co., its first such order from Asia's largest automobile market.

LG Chem will begin delivering the lithium-ion batteries in the second half of this year, the South Korean company said in a statement today without disclosing the value of the contract.

LG Chem started delivering batteries to Hyundai Motor Co. and Kia Motors Corp. last year. The company also signed supply contracts with General Motors Co. and Eaton Corp. Chief Executive Officer Kim Bahn Suk said on Jan. 29 the company is seeking orders from China and Europe.

Global demand for electric cars will increase from 900,000 units last year to 3.3 million units by 2013 and 4.6 million by 2015, LG said in June. Rising demand will boost the battery market to 10 trillion won ($8.6 billion) by 2015.

The Seoul-based chemical maker also signed a preliminary agreement with a research unit of Changan Automobile to cooperate in developing technologies of hybrid and electric car batteries, according to the statement.

LG Chem dropped 1.7 percent to 203,000 won in Seoul trading as of 12:10 p.m. local time, compared with a 3.1 percent decline in the benchmark Kospi index.