Korean giant, LG Chem, has announced its putting another US$500 million into its New Energy Vehicle battery production plant in Nanjing, to meet the needs of Tesla as the US car maker prepares to export vehicles made in Shanghai to Europe.
The news came last week that the investment will put the total LG Chem has put into Nanjing at over ₩2 trillion (US$1.8 billion). This new half-billion dollar shot in the arm is expected to last until the end of 2022.
The money is slated to be used in ramping up the company’s production of lithium-ion batteries at one of two LG Chem factories in Nanjing, that which produces cylindrical batteries known as 18650 type.
The batteries are then destined to be purchased by a number of vehicle manufacturers, but most famously Tesla, for its Model 3 and the upcoming Model Y.
The Model 3 cars made in Shanghai are due to start shipping this month for sale in Europe, while Tesla awaits last-minute approvals from the Chinese government to begin mass production of the Model Y.
LG Chem in Nanjing was confirmed to have started producing high-nickel-content batteries that shall be used to power the Tesla Model 3 last September, as this publication wrote at the time.
Tesla’s decision to use LG in Nanjing to supply it with batteries for its Gigafactory 3 in Shanghai is partly based on the convenience of logistics, but also on account of LG Chem’s rich experience in producing batteries with outstanding performance for electric buses.
Last week’s news has largely eclipsed another US$300 million investment which LG is also making in Nanjing, into LG Electronic’s auto-component factory. The facility produces components for electric vehicles such as car motors, chargers, converters, displays and radar, reports Korea Electronics Industry Media, The Elec.
While the newly announced investments are needless to say great news for the Nanjing economy that will generate large numbers of jobs, they also go a long way toward the city solidifying her ambitions in the field of New Energy Vehicles, helping to realise China’s plans for a carbon-neutral future in the process.
