Analysts at some domestic securities companies are upgrading the target stock price of LG Chem, citing the growth potential of the rechargeable battery market.

Eugene Investment Securities said Friday that the lithium-ion battery maker’s target stock price was raised to 384,000 won ($350) from 302,000 won.

“The rising sales of the U.S.-based Tesla’s electric vehicles will have a positive effect on LG Chem’s battery business,” said Eugene researcher Kwak Jin-hee.

“Considering Tesla’s target sales in 2013, the operating rate of LG’s cylindrical battery plant is likely to grow to 90 percent from the current level of 60 percent.”

Currently, Panasonic is a solid partner of Tesla. The Japanese company signed a contract with Tesla in 2011 to supply its secondary, or rechargeable, batteries for 80,000 Model S electric cars by 2015. Since then, sales volume has steadily grown.

The figure stood at 6,000 in 2011, and the cars sold more than 10,000 units in the first half of this year. Sales are likely to reach this year’s target of 20,000 units, analysts predicted.

“With the rising popularity of Model S, Tesla is expected to diversify its supply chain instead of limiting it only to Panasonic. There are expectations that secondary battery makers like Samsung SDI and LG Chem will be added as new suppliers,” an industry source said.

Because of the strong sales, nearly 10 percent of new demand is expected to be created in cylindrical batteries.

Tesla is the first company attempting to use the battery for electric cars. Though thousands of them are needed for one car, its safety and efficiency are already proven as they have long been used for laptops.

As users are moving away from laptops to tablet PCs recently, battery makers like LG Chem and Samsung SDI are seeking new markets.

“Samsung SDI is turning to new markets such as electric cars, electric vehicles and gearing tools. From this fall, we will supply batteries for BMW i3,” company spokesperson Seo Hye-soo said.

“However, it will take some time for electric cars to be mass-produced due to lack of charge stations.”

By Shin Ji-hye (shinjh@heraldcorp.com)