LG’s Nanjing Battery Factory Affected by Denial of Government EV Subsidies

koreaherald.com

Thursday morning, the Chinese government announced a list of 498 eco-friendly car models eligible for subsidies. But in the afternoon of the same day, it suddenly announced a new list, excluding five models using batteries from Samsung SDI and LG Chem.

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In 2015, LG Chem built a battery plant in Nanjing, eastern China, capable of supplying batteries for 100,000 electric vehicles. In the same year, Samsung SDI also built a plant in Xian, central China, capable of providing batteries for 150,000 electric vehicles.

The revised list of 493 models include around 50 models using Chinese batteries, which have not yet been certified by the government.

“EV makers are not able to have a competitive edge without government subsidies because the cost of batteries takes up around half of total EV costs. The continued exclusion has made Samsung and LG’s plants in China not (able to) operate at (their) full capacities,” said an industry source, who declined to be named.

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