Shanghai Maple Guorun, an indirect 99% owned subsidiary of Geely Automobile, has announced a new joint venture partnership with LG Chem.

Both partners will establish a joint venture company with a 50:50 share structure to produce and sell new energy vehicle batteries. Total registered capital in the new joint venture will reach US$188m split equally.

Through 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.

“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,” said LG Chem Energy Solution president, Kim Hyun.

The Chinese new energy vehicle market reached 1.25m units in 2018, accounting for 62% of total global electric vehicle sales. In May 2019, Geely Auto sold more than 10,115 electrified vehicles, representing a 25% increase in sales compared to 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.