LG Electronics Inc. climbed by the most in seven years in Seoul trading after the South Korean electronics maker struck a deal to co-develop General Motors Co.’s Bolt electric vehicle.
The shares jumped 14 percent, the most since 2008, to close at 53,600 won. The television, smartphone and battery maker’s stock has slumped 9.3 percent since the beginning of the year.
GM and LG extended their partnership as carmakers around the world are trying to develop more alternative fuel and fuel-efficient vehicles. Tesla Motors Inc. has drawn customers with sporty electric cars, while Toyota Motor Corp. has begun marketing its hydrogen fuel-cell Mirai sedan.
“The market is not just looking at this single deal, but also expects LG is looking to expand this business to other places such as Europe and China,” said Park Kang Ho, an analyst at Daishin Securities Co. in Seoul. “A deal with GM shows that LG is on track to find future growth engines despite its struggling smartphone business.”
LG is supplying 11 systems for the car, including the new Bolt’s electric-drive motor, charger, batteries, the companies said in statement. The companies agreed in 2011 to jointly design and engineer electric vehicles, a deal that expanded on an existing relationship.
The new Bolt will be capable of driving 200 miles (320 kilometers) on a charge. The concept car was shown at the North American International Auto Show in Detroit in January and Chevrolet said it will go into production in late 2016.