A major South Korean Company has announced an agreement with Iranian business partners to produce electric vehicles and auto parts in Iran.
The company, which is reportedly a subsidiary of Korea's LG, will be collaborating with Iranian partners to also set up infrastructure projects, Shana reported.
The company is ready to set up firms focused on producing car batteries and other equipment needed for manufacturing EVs.
LG Electronics, LG Chem and LG Innotek will develop key parts, including engines and batteries. LG CNS will handle the construction of charging stations while Iran Khodro manufactures the vehicles.
The two sides have agreed to manufacture 60,000 EVs in Iran by 2023.
According to Korean media reports, most of the articles agreed on are at a preliminary stage and will be finalized by the end of the year so that the joint activities can come into effect without any hitch.
An LG staffer said, "We stayed in Iran despite international sanctions, which appears to have helped us win the trust that led to the agreement," according to Korea's Chosun Media Group.
Financial Tribune contacted the Korean economic giant for further information, but the group had not responded by the time of going to print.
LG Automotive Initiatives
LG will expand collaboration with Iran to help initiate car exports to other regional countries.
Regional countries like Iraq, Azerbaijan Republic and Oman, which have assembly lines of Iranian cars, are target markets for joint venture vehicles.
LG has also planned projects outside Iran, including EV production lines, EV charging stations and auto parts production lines.
LG Chem, the battery development side of the Seoul-based company, plans to work with automotive companies to sell their auto-chargers and energy storing facilities.
In the US, GM has signed a deal with LG to supply the Chevrolet Volt with their technology. Tesla has also signed up with the group to develop battery technology.
In Europe, LG Chem was reported in April to be planning a massive battery factory in Poland.
The plant is supposedly located in Wroclaw, a city in Poland.
Wider Korean Deals
Earlier in May, South Korean President Park Geun-hye, along with 236 delegates, paid a visit to Tehran, which was focused on boosting bilateral economic cooperation.
The visit–the first by a South Korean president in more than half a century–represented South Korea’s efforts to tap into business opportunities in Iran.
“I believe Iran can become a land of opportunity for many South Korean firms,” Park told reporters on the plane back to Seoul.
During her visit, the two countries signed dozens of preliminary deals that could lead to contracts worth tens of billions of dollars.
Seoul hopes the signed memoranda of understanding could pave the way for South Korean companies to eventually win massive infrastructure projects in Iran.
South Korea’s presidential office has described the MoUs as the “biggest-ever economic accomplishment”.
