Korean Companies Taking Lead in EV Battery Market

Nov 25, 2014

An increasing number of carmakers such as Nissan and Daimler are opting for Korean battery manufacturers’ products instead of doing the lithium-ion secondary battery business on their own. The trend is expected to be a boon for LG Chem, Samsung SDI, and SK Innovation in the fledgling eco-friendly car battery market.

According to industry sources, Daimler recently acquired Evonik’s 50.1 percent shares in Li-Tec, a joint venture established by the two six years ago, and is going to stop battery cell production from December of this year. Also, it transferred to the factory workers to Deutsche Accumotive, another subsidiary manufacturing battery packs, to purchase battery cells from without.

“Nissan has purchased EV batteries from AESC since 2009, but will diversify the supply sources to LG Chem and many more,” Renault Nissan Alliance Chairman Carlos Ghosn said in September. It is said that AESC’s products are approximately 15 percent more expensive than those of LG Chem.

These decisions come about because it is difficult for a company to realize the economy of scale and achieve price competitiveness on its own in the eco-friendly vehicle market. Battery manufacturers that have produced small batteries for use in smartphones and the like have more advanced technological strength, too. It is in this context that Hyundai Motor Company, Kia Motors, and BMW have procured battery cells from external sources from the get go.

At present, LG Chem’s customers include not only Hyundai and Kia but also about 20 automakers such as GM and Ford. Samsung SDI has done business with about 10, including BMW, as well. SK Innovation, which started relatively late, has supplied batteries for Kia Motors’ Soul EV, and set up a joint venture in China with the Beijing Automotive Group. The EV battery market is estimated to grow to 13.2 trillion won (US$11.9 billion) by 2018.

Source: BusinessKorea