WARSAW -- South Korea's LG Chem is seeking to tap Europe's booming electric-car market by setting up a battery plant in Poland to supply automakers.

The company will invest 1.3 billion zloty ($339.4 million) in the plant near Wroclaw, southwestern Poland by 2018 with a plan to manufacture 100,000 batteries annually starting in 2019. They will power electric vehicles with a maximum range of 320 km (200 miles), the Polish development ministry said in a statement.

"Investors like LG Chem fit very well into our development strategy," Deputy Prime Minister Mateusz Morawiecki told reporters during a groundbreaking ceremony at the site of the future facility in Biskupice. "We're moving into a high-tech car industry, protecting the environment and boosting innovation."

The plant will be the first large-scale automotive lithium battery plant in Europe, LG Chem said in astatement.

European automakers are pushing to make electric cars more appealing to consumers as regulators demand lower emissions. Volkswagen Group, which is still recovering from its diesel-emissions scandal, has the most ambitious plans, with a target of selling at least 2 million electric cars by 2025, backed by rolling out 30 battery-powered cars in the coming years. BMW Group will add an electric-powered Mini and X3 SUV to its existing EV lineup, while Mercedes-Benz is targeting at least 10 battery-powered cars.

"We will turn the Poland EV battery plant into a mecca of battery production for electric vehicles around the world," UB Lee, the head of LG's energy solution company, said in the statement.

For Poland, home to a majority of the European Union's most polluted cities, the deal is part of a strategy to bolster sagging investments by enticing foreign investors into its car industry. The nation is in the final stage of negotiations with Mercedes, which in May pledged to spend about 500 million euros ($560 million) to build an engine factory, according to the deputy prime minister.

"In October or November we will make new steps in the auto industry," Morawiecki said, without elaborating.