South Korean chemical group LG Chem Ltd has said its shareholders have approved a proposal put forward by the company in September to spin-off its battery business into a separate company.

LG Chem's battery division is the world's largest supplier of batteries for electric and hybrid vehicles, having recently moved ahead of China's Contemporary Amperex Technology Company Limited (CATL).

South Korea's SNE Research claims LG Chem accounted for almost 25% of the global EV battery market in the first nine months of 2020 and has a battery production capacity of 19.9 gigawatt-hours (GWh) per year.

Shareholder approval means LG Chem can move ahead with plans to establish a new separate wholly-owned company on 1st December, tentatively called LG Energy Solutions, encompassing all of its battery operations.

As an independent entity, LG Energy Solutions would be able to respond more quickly to the demands of the rapidly expanding global electric vehicle market. LG Chem confirmed the spin-off will make it easier to secure the massive capital investment required to keep up with demand, with the company currently investing more than KRW3trn (US$2.6 billion) annually in facility investment.

LG Chem has five battery plants worldwide at present, one each in South Korea, USA and Poland, and two located in China. Earlier this year the company began construction of a second battery plant in the USA, in the state of Ohio in a joint venture with General Motors.