Its top three manufacturers, LG Energy Solution Ltd, SK Innovation and Samsung SDI, supplied 31% of global batteries in the first half of the year.
There has been a major shift in South Korea's approach to what is seen as a new, high-growth industry: electric vehicle batteries. It is positioning itself as a leader in the global electric vehicle supply chain. Its top three manufacturers, LG Energy Solution Ltd, SK Innovation and Samsung SDI, supply 31% of global batteries.
South Korea's battery industry is backed up by proactive government policies. They are also supported by investors who want to secure the future supply of raw materials for components.
The goal of phasing out combustion vehicle sales to reduce emissions has changed the landscape of the automotive industry. Vehicle and component manufacturers are replacing platforms to cope with new powertrains. And they are doing it in record time.
Currently, many governments offer incentives to purchase electricity to compensate for the high cost. However, costs are declining, thanks to improved supply chains and increased economies of scale. Consequently, the aid will decrease until it disappears.
Global EV sales are expected to be below 4 million units this year. It is still a small part of the approximately 90 million total vehicles expected to be sold worldwide. Therefore, a complete switch to electric vehicles will require a great deal of investment and restructuring.
Analysts expect those numbers to continue to grow, for electric vehicles. As for those with fuel cells, the notable increase is expected in the second half of the decade.
South korea and batteries
Obtaining sufficient volumes of batteries for electric vehicles is a major problem facing the automotive industry. The context is complicated. Vehicle manufacturers are rushing to sign multi-million dollar deals to secure long-term battery supplies. Meanwhile, battery manufacturers are faced with the problem of sourcing enough raw materials to allow this industry transformation to take place.
The world's largest manufacturer is Contemporary Amperex Technology Company Limited (CATL) of China, with an estimated global share of 31% in global sales.
The main manufacturers of batteries for electric vehicles in South Korea are: LG Energy Solution Ltd, SK Innovation and Samsung SDI. All three are moving rapidly to meet the growing global demand for electric vehicle batteries.
According to South Korean research firm SNE Research: It is estimated that together they accounted for about 31% of global shipments of electric vehicle batteries in the first half of 2021.
LG, South Korea's leading battery company
LG Energy Solution Ltd is by far the largest manufacturer of electric vehicle batteries in South Korea. Its share of global battery deliveries is estimated to have reached 23% in the first half of 2021. Among its customers: Hyundai, Kia, Tesla, Ford, GM, Renault and Volkswagen.
LG Energy Solution's global electric vehicle battery manufacturing network includes plants in South Korea and Poland and China. Currently, its total production capacity is enough to power about 2 million electric vehicles. And they hope to double this number in the next few years.
Last July, LG Energy Solution announced plans to invest more than US $ 12 billion to develop next-generation battery technology. Its goal is to expand battery production in Korea to meet global needs.
The company is also investing heavily in its overseas operations. And for this it has also reached important agreements with other companies.
In the United States, it has a planned investment of US $ 4,500 million. Here, the company is also building battery plants in partnership with General Motors.
Additionally, LG Energy Solution has just signed a joint venture agreement with Hyundai Motor to build a battery plant in Indonesia. The country has abundant nickel reserves.
The group has also signed agreements with mining companies around the world to ensure the supply of raw materials for the next ten years.
SK
which spun off its battery business in early October. The company is part of the South Korean energy and petrochemicals conglomerate SK Group. Recently, it has finalized a major electric vehicle battery partnership agreement with Ford in the US. SK Innovation will have a 39% stake in a new joint venture, called BluOvalSK, which plans to build three plants in the US. In addition, they hope to extend the partnership to Europe and China.
This is in addition to SK Innovation's plans to build its own plants in China, Europe and the US. The company counts Hyundai, Kia, Ford, Tesla and Volkswagen as its key customers.
Samsung
Samsung SDI developed its electric vehicle battery business following the acquisition of Germany-based Magna Steyr Battery Systems GmbH in 2015. It is estimated that it accounted for just over 5% of global shipments in the first half of 2021. Its Hungary's plant, which is in full expansion, supplies European automakers, including BMW, Fiat and Volkswagen.
Samsung SDI has established new partnerships with other companies to expand its cathode manufacturing by 50% in 2023. Among them, the one established with EcoPro BM in the South Korean city of Pohang. It is also investing US $ 127 million in its wholly owned subsidiary, SMT Company, to expand its capacity.
