LG Chem and Chang’an to set up joint venture

Korea’s chemical and rechargeable battery maker LG Chem Ltd. has agreed to cooperate with China’s third-largest automaker, Chang’an Automobile Co., to develop lithium-ion batteries used in electric cars, a local report said yesterday.

Citing an official at Chang’an Automobile, the Chinese-language newspaper West Chin City Daily said the agreement is still in the early stages, but the two sides are likely to set up a joint venture.

Nickel-hydrogen batteries are commonly used for electric vehicles in China, while lithium-ion batteries are known to have a better battery-energy utilization, extended life and stronger power.

Chang’an Automobile has so far launched in the country three models of hybrid-electric automobiles. Sales of these three models account for more than 50 percent of those of China’s energy-efficient automobiles.

China has been encouraging its automakers to jump into the burgeoning market of hybrid and electric cars so they can secure a foundation to compete with global automobile giants.

The Chinese Ministry of Industry and Information Technology said earlier that it will invest more than 100 billion yuan ($14.8 billion, 16.5 trillion won) to help nurture its fledgling environmentally friendly car industry over the next decade, starting this year.