The leading role of South Korea in the production of batteries for cars was made clear this year by the US automaker GM. The company voluntarily recalled all Bolt electric cars sold on August 20. The reason: there is a risk of fire from the batteries. And the manufacturer is the battery subsidiary of South Korea’s LG Chem group, namely LG Energy Solutions.
On the next trading day, LG Chems’ share price plunged 11 percent and has not recovered since then. Because GM said the cost was at least one billion dollars. But in Korea this recall is seen as a setback, not the end of LG Chem’s ambitions. Because the company is at the center of South Korea’s K-Battery strategy.
“Global Power Center of Battery Production”
None other than South Korea’s President Moon Jae-in specified this plan in more detail in August – right in front of one of the GM supplier’s largest battery factories. “Korea’s goal is clear,” Moon promised to representatives from South Korea’s battery industry. “Our country wants to become a global power center for battery production by 2030.”
The government is reacting to the growing importance of Chinese manufacturers. According to the market researcher SNE Research, the Chinese company CATL led the market in the first seven months of the year with a share of 30 percent, followed by LG Energy Solution from South Korea with 24 percent and Panasonic from Japan with 15 percent. SK Innovation and Samsung SDI were fifth and sixth, respectively, with a market share of just over five percent, behind China’s BYD.
Japan has always tried everything possible with electronics – and often the impossible. Every Thursday our author Martin Kölling reports here on the latest trends from Tokyo.
More articles on “Post from Japan”
In a tried and tested concerted manner, however, the state and corporations want to overtake the Chinese and Japanese. The state intends to invest 40 trillion won (around 30 billion euros) in the domestic battery industry, half of which will be used as grants for new plants. As a gift in return, the host LG Chem announced that it would invest 15.1 trillion won (around 10 billion euros) in building a battery hub.
Investments in the domestic battery industry
The local battery rivals Samsung SDI and SK Innovation were politely silent at the event, but they are also there. SK Innovation plans to invest $ 26 billion to increase its annual production capacity fivefold to 200 GWh by 2025. In addition, the company wants to follow LG Chem and spin off the battery division in order to be able to grow faster.
On Tuesday, SK Innovation announced that it would work with Ford to build three battery plants in the USA. The Koreans want to invest 5.1 trillion won (3.7 billion euros) in the BluOvalSK joint venture over the next five years, while Ford intends to invest 5.7 billion euros. The company has already built a $ 2.6 billion battery plant in Georgia to supply the batteries for Ford’s F-150 EV electric pickup trucks.
Samsung, on the other hand, hid the exact amount of its investments in cordless plants in August in a three-year investment plan amounting to 175 billion euros. A large part of the money goes into the chip division.
The K-Battery strategy is part of an even bigger plan: With the Korean New Deal, President Moon wants to use the corona crisis with a large investment program to turn the country into a “digital powerhouse”. Korea also wants to establish itself as the world market leader in the chip industry.
Battery delivery close to production
With the small semiconductors, however, the chances are slightly greater than with the heavy battery cells of actually leaving production in the country. One reason for this is that the USA, the European Union, China and Japan also want to put a lot of money into building regional supply chains with a lot of money to secure their own auto industries.
Second, customers, the car manufacturers, are also pushing for production-related delivery by the battery manufacturer of choice. This is already indicated in the investment plans of the Korean battery manufacturers. SK Innovation has long-term supply contracts with the Hyundai Motor Group, Volkswagen, Ford Motor and other automobile manufacturers and is therefore building five new factories – in the USA, Europe and China.
The national program could therefore only lead to a mixed result: It is possible that battery production in Korea will not grow as strongly as hoped. But the Korean manufacturers could together achieve the highest market share globally.
Disclaimer: This article is generated from the feed and not edited by our team.