South Korea's LG Chem said it had signed an agreement with China's Geely Auto Group to jointly invest in a new electric vehicle (EV) battery manufacturing plant in China.
The new factory was expected to become operational by late 2021 with a production capacity of 10 gigawatt-hours (GWh), with construction scheduled to start later this year.
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The two partners would contribute an equal share of the KRW206bn (US$174m) investment, with the name of the joint venture and location of the plant yet to be disclosed.
The factory will produce batteries for electric vehicles to be produced by Geely and its affiliates scheduled to go on sale in China from 2022.
The automaker sold around 1.5m cars in China last year.
Sales of new energy vehicles in China, mainly electric and plug-in hybrid vehicles, are expected to grow sharply over the next five years driven by compulsory sales quotas imposed by the central government.
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By GlobalDataBy 2025, annual sales of these vehicles are forecast to amount to around 5-6m from 1.3m last year.
