LG Chem, Vingroup advance EV battery plant project

South Korea's LG Chem and Vietnamese conglomerate Vingroup are advancing plans to build a battery plant in northeast Vietnam's Haiphong city.

The companies, which signed a preliminary agreement on the plant in September last year, formed a joint-venture company last week. Plans call for the VinFast Trading and Production unit of Vingroup to build and operate the plant, while LG will provide technology, consulting and training.

The venture is scheduled to begin producing EV battery packs next year for VinFast's electric scooters and cars. The companies failed to disclose figures for capacity or production targets. Vingroup sees the plant producing batteries for EVs and VinSmart consumer electronics.

VinFast is looking to increase the domestic content of its products and drive down costs by producing EV batteries domestically instead of ordering units from overseas. It took over a General Motors factory in Hanoi last year, while the company is developing a low-cost EV for the Vietnamese market with German automotive engineering firm Edag.

VinFast's first car model is scheduled to go on sale in Vietnam later this year, while its first scooter hit the market in 2018. The company will have initial capacity to produce 250,000 units/yr at its manufacturing complex under development in Haiphong, including conventional models and EVs.