* Trial production will begin in July or Aug in Michigan -
* Slower-than-expected Volt demand delayed operation of U.S.
* LG Chem tries to minimise losses on electric car business
SEOUL, April 19 South Korea's LG Chem
aims to start production at its U.S. car battery
factory in the second half of this year, two executives said on
Friday, as the firm tries to revive the plant's fortunes despite
slow demand for electric vehicles.
"We plan to start a trial production in July or August," Kim
Jong-hyun, head of LG Chem's battery division, told reporters on
the sidelines of an earnings conference in Seoul.
With U.S. government funding worth over $150 million, LG
Chem has constructed a $304 million lithium-ion battery cell
manufacturing plant in Michigan, aiming to produce enough
battery cells annually to equip 60,000 electric vehicles by the
end of 2013.
But the plant has not started production because of slower
than expected demand for electric vehicles. LG Chem supplies
electric car batteries for General Motors' Volt and Ford
Motor's Focus Electric from its South Korean facilities.
"We will start preparations for the plant's operation from
the second half. It will soon commence operation," LG Chem's
chief financial officer Cho Suk-jeh said.
GM's Volt sales in the United States tumbled 35 percent to
less than 1,500 vehicles in March from a year earlier.
"Several years ago, there were high expectations of electric
cars, but the market is slower than expected," Kim said, citing
expensive car costs, lack of battery charging infrastructure and
limited driving range as major stumbling blocks.
But Kim said as electric car prices go down, the market
would expand. He said plug-in electric vehicles had more growth
potential than hybrid ones, as automakers seek to cope with
tougher emissions regulations and differentiate their models
LG Chem, which also supplies batteries to the likes of
Renault SA, suffered from losses in its electric car
battery business in the January to March period because of
"We don't think we will be able to make profit on car
battery business (this year). We are trying to minimise losses
on car batteries," Cho said.
LG Chem, a unit of South Korean conglomerate LG Group, also
produces chemicals products and supply small lithium-ion
batteries for mobile devices such as Apple Inc's
iPhones and LG Electronics' smartphones.