SEOUL--South Korea's LG Chem Ltd. has secured a deal worth
hundreds of millions of dollars to supply electric vehicle
batteries to Audi AG, a unit of German auto maker Volkswagen
AG.
LG Chem, the world's largest battery maker by sales, didn't
disclose details of the deal, but said the contract would help
Volkswagen's efforts to revive the sluggish growth of emission-free
vehicles globally.
"The batteries will be used in Audi's next-generation plug-in
hybrid electric vehicles. Given that Audi shares many auto
platforms with parent Volkswagen, we expect more such deals from
the German auto group, " LG said in a statement on Wednesday.
It didn't disclose the exact value of the deal but said it is
worth hundreds of billions of won. It also declined to reveal when
it will start delivering the contracted batteries, and said the
timing is closely linked to the launch of Audi's new electric
vehicles.
LG Chem currently produces batteries for electric-car models
made by auto makers such as General Motors Co., Renault SA, Ford
Motor Co., Hyundai Motor Co. and Kia Motors Corp.
The deal comes as several European auto makers, including BMW
AG, Volkswagen and Daimler AG's Mercedes-Benz unit, are introducing
electric-propulsion vehicles this year to comply with strict new
emission rules in Europe.
Despite an aggressive move by the car makers to push electric
vehicles, a campaign that has included free charging stations and a
raft of price cuts and cheap lease deals, the vehicles haven't been
hot sellers globally.
Other obstacles to their sales include overcoming buyers"
concerns about the vehicles" short driving range, long charging
times and the lack of charging stations.
LG Chem announced last week that it is jointly developing, with
GM and other global auto makers, a battery pack that can attain 200
miles of driving range on a single charge--more than double that of
most electric vehicles on the road today.
LG, which has factories in the U.S. and South Korea, said in
July it will build another electric-car battery plant in China by
next year, betting on rapid growth in the world's biggest car
market.
Write to In-Soo Nam at In-Soo.Nam@wsj.com
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