LG Chem, Changan Auto sign deal for lithium-ion battery development

Shanghai January 11 (Gasgoo.com) Chongqing Changan Automobile Co. signed yesterday a strategic agreement with LG Chem Ltd., South Korea's biggest chemicals maker, to jointly develop lithium-ion batteries for new energy vehicles, Chongqing Commercial Daily reported Tuesday.

LG Chem will supply lithium-ion batteries to Changan for its new energy vehicles, said Ren Yong, Deputy General Manager of Changan new energy company, adding that both sides are still discussing whether to establish a joint venture plant in Chongqing, a major city in southern China.

The cooperation can take various forms. If LG likes to set up a plant in Liangjiang Xinqu, Chongqing, then it will simply be the supplier of lithium-ion batteries for Changan. However, if the two sides are going to build a new plant together, then Changan will formally enter the lithium-ion battery industry, Ren said.

With ample experience in development of lithium-ion batteries for hybrid vehicles and all-electric vehicles, LG Chem started delivering batteries to Hyundai Motor Co. and Kia Motors Corp. in 2009. It has also signed supply contracts with General Motors Co. and Eaton Corp., its Chief Executive Officer Kim Bahn Suk said earlier.

Changan's new energy vehicle sales account for more than 50% of China's total, taking the lead in the national trail running program. By the end of 2010, the company had developed and launched eight new energy models, including the Changan BenBen Love, Benen Mini Electric, Zhixiang HEV (hybrid-electric vehicle), Jiexun HEV (a mild hybrid car), Zhixiang fuel-cell SUV, etc., Ren said. "A B-class pure electric model will roll off the production line at Changan's new facility in Beijing this year."