Work starts on Xi'an vehicle battery base

Construction started on Monday for China's largest production base for vehicle batteries in the Xi'an Hi-Tech Industrial Development Zone.

Backers of the zone in the capital of Shaanxi province aim to reach sales of $1 billion by 2020.

Total investment will be $600 million, with work to be completed in phases over five years.

The project is being led by South Korea-based electronics giant Samsung, in cooperation with Anhui Ring New Group Ltd and the Xi'an Hi-Tech Industrial Development Zone.

Operations will start in October 2015, when the facility will be able to produce batteries for more than 40,000 pure electric vehicles annually, said Jeseung Park, executive vice-president of Samsung.

"The project is being carried out by Samsung SDI, a subsidiary of Samsung Group in the electronics field. The main business of SDI is the production of lithium batteries, in which it ranks first in the world market," Park told China Daily on Monday in Xi'an.

Anhui New Ring is the top Chinese maker of auto parts including piston rings and cylinder liners, with a leading market share in China, according to Jiang Zelin, executive deputy governor of Shaanxi province.

Jiang said that the Shaanxi provincial government signed a memorandum of understanding with Samsung SDI and ARN in January this year to build the base.

Sangjin Park, president and CEO of Samsung SDI, said that China will be the world's largest electric car market. "Taking into account the supporting infrastructure and industrial synergies, we decided to build the battery production base in the Xi'an Hi-tech Development Zone, next to the Samsung Electronics semiconductor plant, which went into operation in May," he said.

China is promoting the development of the EV industry as it became the world's largest auto market in 2009 and faces increasing air pollution due to an increasing number of vehicles.

Under the New Energy Automotive Industry Development Plan issued by the State Council, the Chinese cabinet, on July 9, 2012, China will become the world's largest EV market with 5 million pure EVs and plug-in hybrid vehicles on the road by the end of 2020.

Xi'an Mayor Dong Jun said that the vehicle industry is a core sector in the Xi'an Hi-Tech Industrial Development Zone and Samsung's battery production base will further improve the new energy automotive industry chain in the zone and help promote the development of China's new energy automotive industry.