LG Chem said on March 3 that it will take over a nearby home appliance plant to expand its electric vehicle battery plant in Wroclaw, Poland. The move is seen as a move to counter the rapidly growing European electric vehicle market.
The plant to be purchased by LG Chem is an assembly plant for home appliances by Bestel, a Turkish home appliance maker. According to Turkish media, the site is 223,000 square meters and the acquisition price is $31.4 million. LG Chem explained that the deal was made to secure a site for the future expansion of production facilities.
The reason why LG Chem is expanding its production facilities in Europe is that because the European electric vehicle market is expected to grow rapidly this year. The acquisition of the plant also appears to have been made to prepare for the demand for batteries from European carmakers.
"We expect demand for European electric vehicles to grow 2.5 times this year compared to last year," LG Chem said in a conference call on Feb. 3. "We are expanding production capacity to cope with the rising volume of orders for electric vehicles' batteries, and we are planning to secure 120 GWh by adding 20 GWh by next year."
LG Chem carried out 3.8 trillion won in facility investments last year in the battery sector and plans to invest 3 trillion won this year as well.
