© Geely Auto Electronics Production | June 13, 2019
Geely & LG Chem to set up JV to produce batteries in China
Shanghai Maple Guorun, an indirect 99% owned subsidiary of Geely Automobile, the listed arm of Geely Auto, are establishing a new joint venture partnership with LG Chem of South Korea.
Under the terms of the agreement, Shanghai Maple Guorun and LG Chem will establish a joint venture company with a 50:50 share structure that will be jointly engaged in the production and sales of new energy vehicle batteries. Total registered capital in the new joint venture will reach USD 188 million USD split equally between both parties. Geely is aiming to have 90% of its sales to coming from electrified vehicles – including mild hybrids, plug-in hybrids and pure electric vehicles – starting from 2020. The joint venture with LG Chem will help Geely to realise this with a stable supply of core components. “Geely Auto has already created a strong supply chain network for the production and development of new energy vehicles. The signing of this joint venture agreement with LG Chem further strengthens our position as a leader in new energy vehicles, where we aim to create more value and better ownership experience for our consumers,” says Mr. An Conghui, President of Zhejiang Geely Holding Group, CEO and President of Geely Automobile Group, in a press release. Kim Jong-Hyun, President of LG Chem’s Energy Solution added: “This joint venture with China’s leading privately-owned automotive company, Geely Auto, can be seen as contributing to the progress of China’s overall electric vehicle industry.” The Chinese new energy vehicle market reached 1.25 million units in 2018, accounting for 62% of total global electric vehicle sales, with strong growth predicted for the overall market in coming years. In May 2019, Geely Auto sold more than 10,115 electrified vehicles, representing a 25% increase in sales over the same period a year earlier. Within the next two years Geely Auto plans to launch more than 30 electrified vehicles including hybrid and pure electric vehicles.