- New 50:50 joint venture to produce batteries in China.
- Joint venture to have a registered capital of 188 million USD
2019 June 13, Hangzhou Bay, China. Shanghai Maple Guorun, an indirect 99% owned subsidiary of Geely Automobile Holdings (HK.0175), the listed arm of Geely Auto, today announced a new joint venture partnership with LG Chem of South Korea, one of the world’s leading manufacturers of electric vehicle batteries.
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 188 million USD (circa 207 billion Korean Won) split equally between both parties.
In November 2015, Geely Auto was one of the world’s first automotive brands to commit to electrifying its product range. Under the Blue Geely Initiative, Geely Auto aims for 90% of its sales to come 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 its Blue Geely Initiative with a stable supply of core components for Geely Auto, to be used in future products to meet Chinese consumer demand for new energy vehicles.
Mr. An Conghui, President of Zhejiang Geely Holding Group, CEO and President of Geely Automobile Group, said: “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.”
Kim Jong-Hyun, President of LG Chem’s Energy Solution said: “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. In the first five months of 2019 Geely Auto sold a total of 41,615 pure electric and electrified vehicles. Geely launched the Geometry brand in April 2019 as a pure electric brand within Geely Auto, and has secured strong sales for its first model: Geometry A. Within the next two years Geely Auto plans to launch more than 30 electrified vehicles including hybrid and pure electric vehicles.
Further details on the new joint venture will be announced in due course.