Having become number one in the world's battery market, South Korean chemical company LG Chem is spinning off its battery unit.
The new company, wholly owned by LG Chem, is to be launched on December 1st, tentatively named LG Energy Solutions.
LG Chem said in a statement Thursday that now is the right time for a spin-off, with the world's battery market growing at a rapid pace and the company starting to yield a sizable profit.
Plus, the unit will need to secure massive amounts of capital, because it's now pouring about 2.5 billion dollars a year into facility investment.
The spin-off decision shows both LG Chem's confidence in its EV battery business and its determination to further solidify its position in the sector.
In the second quarter of this year, LG Chem's operating profit, which had been declining, rose to a record high.
Market expectations are that the company's operating profit will continue to rise for the rest of this year.
In terms of market share as of May this year, LG Chem has over 24 percent, outpacing China's CATL and Japan's Panasonic.
But LG can't stop there because CATL has access to a tremendous EV market in China, and Panasonic has an advantage in the U.S. thanks to its long history and close ties to Tesla.
LG Chem is a key supplier of batteries for electric vehicles, including those of GM, Ford, Volvo and South Korea's Hyundai Motor and Kia Motors.
It's looking to boost its production capacity to 100 gigawatt hours by the end of this year, which is enough to supply batteries for about 1.7 million electric cars.
Oh Jung-hee, Arirang News.