LG Chem is to supply batteries to local electric vehicle (EV) manufacturer CT&T from next year.

The announcement marks the nation's top battery maker's advancement into the electric vehicle (NEV) market, the Korea Times said.

"LG Chem and CT&T are still engaged in detailed talks over the initial supplement size," company spokesman Song Choong-sup said without elaborating.

Song said LG Chem, led by CEO Kim Bahn-suk, will provide its secondary batteries to CT&T's strategic electric vehicles such as e-ZONE and join forces for CT&T's upcoming models.

The partnership coincides with South Korea's presidential office using three CT&T EVs as part of a test program for such vehicles, officials say.

CT&T is one of the world's leaders in manufacturing small electric vehicles such as golf carts.

It exports to China, Canada, the United Arab Emirates and Japan, and has a contract with the California state government to provide 4,000 NEVs to police organisations. They will be used as downtown parking supervision vehicles.

The move goes one step further than its local rival SK Energy, which has also been in talks with CT&T for batteries. SK was expected to supply up to 50,000 units annually to the local carmaker, which produces 60,000 electric vehicles per year in South Korea and China.

Intended for short trips at lower speeds, the NEV reaches a maximum speed of 40 mph, but can travel 80 miles on a single charge. Recharging the battery takes two hours but that time may be drastically reduced in the near future.

"We are also focusing on a niche market," said Song of LG Chem, adding that the NEV is not intended to compete with hybrids or "full-speed, big brother" electric cars in development, such as the upcoming Chevrolet Volt.

The global market for NEVs is expected to increase to 1m units by 2012 from an estimated 500,000 units this year, according to market research firms.

LG Chem is currently supplying lithium ion batteries for Hyundai Avante hybrids. The company plans to supply the batteries for General Motors' Volt.

LG Chem will spend $303m over the next three years to build a battery plant in Holland, Michigan.

The US plant, which could be the catalyst for LG Chem to expand in the States, is to be completed by the end of June 2013 after construction begins next July.

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