NINGBO, Zhejiang – Shanghai Maple Guorun, an indirect 99 percent owned subsidiary of Geely Automobile Holdings, the listed arm of Geely Auto, signed a deal with South Korea’s LG Chem on June 13 to establish a 50:50 joint venture in China to produce and sell new energy vehicle batteries.
Total registered capital in the new JV will reach $188 million split equally between both parties. It is expected to help Geely to realize its Blue Geely Initiative with a stable supply of core components for Geely Auto, to be used in future products to meet Chinese consumer demand for NEVs.
In November 2015, Geely Auto was one of the world’s first automotive brands to commit to electrifying its product range. Under the Blue Geely Initiative, Geely Auto aims for 90 percent of its sales to come from electrified vehicles – including mild hybrids, plug-in hybrids and pure electric vehicles – starting from 2020.
“Geely Auto has already created a strong supply chain network for the production and development of new energy vehicles. The signing of this joint venture agreement with LG Chem further strengthens our position as a leader in new energy vehicles, where we aim to create more value and better ownership experience for our consumers,” said An Conghui, president of Geely Holding Group and president & CEO of Geely Automobile Group.
“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 Kim Jong-Hyun, president of LG Chem’s Energy Solution.
The Chinese NEV market reached 1.25 million units in 2018, accounting for 62 percent of total global electric vehicle sales, with strong growth predicted for the overall market in coming years. In May 2019, Geely Auto sold more than 10,115 electrified vehicles, representing a 25 percent increase in sales over the same period a year earlier, bringing the company’s electrified vehicle sales in the first five months of the year to 41,615 units. 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.