Be careful! See how South Korean manufacturers dominate in the field of electric vehicle batteries

Following consumer lithium-ion batteries used in personal computers and mobile phones, South Korean manufacturers will also sweep the market in the automotive sector.

On March 30, 2015, LG Chemical announced that Daimler's new compact EV "Smart EV" scheduled to be launched in 2016 will use the company's lithium-ion secondary batteries. In this way, of the 20 major car brands in the world, Germany’s “VW”, “Audi”, “Dummul”, US “GM”, “Ford”, France’s “Renault” and South Korea’s “modern” etc. 13 brands have become LG Battery's EV battery customers.

Young Soo Kwon, president of LG Chemical Energy Solutions, said, “In order to establish the status of the world’s largest (EV) battery manufacturer, we will lead the EV market with differentiated technologies. Equipped with LG Chemical's battery."

Daimler's Smart EV is a small car that is intended for close-range movement in urban areas. The second-generation models that began production in 2009 are equipped with Tesla’s battery packs, whose battery cells are made by Japanese manufacturers.

However, Daimler used battery packs made by other companies in its third-generation Smart EVs that were listed in Europe and America in 2013. The new generation battery pack has already determined that it will use LG Chemical's battery cells.

Samsung SDI Acquires European Automotive Battery Manufacturers

In February 2015, Daimler convened a meeting of major component manufacturers called "Supplier Day" to discuss the company's core strategy. It is said that lithium ion secondary battery manufacturers only invited LG Chemical.

Automobile manufacturers have highly praised LG Chemical's lithium-ion secondary batteries. General Motors (GM) has identified Lithium-ion rechargeable batteries as the new plug-in hybrid (PHEV) "Chevrolet Volvo" to be launched in 2015. According to the GM's battery manager, "The battery performance of the new Wolanda has been significantly improved through the close cooperation with LG Chem. The company's technical strength is very strong."

Samsung SDI, which has a global share of lithium ion batteries for consumer products, is also actively working on the EV battery business. In late February 2015, the company announced that it had reached an agreement with Canada's Magna International, a major automotive components manufacturer, for the acquisition of its vehicle-mounted battery pack business. It will acquire Magna Steyr, Magna's battery subsidiary in Austria. In addition to battery cells, Samsung SDI will also manufacture vehicle-mounted battery packs in Europe, thereby strengthening the EV battery business with promising growth.

Samsung SDI will supply lithium ion batteries for German BMW's EV "i3" and PHEV "i8". BMW actively participates in EV and PHEV business. It is expected that more models will be launched in the future and the output is expected to expand. Therefore, the two companies have strengthened their cooperation system. The BMW 3 Series PHEV, which is scheduled to be launched in 2016, is also expected to be equipped with Samsung SDI-produced batteries.

Panasonic and Tesla unite to launch a counterattack

However, for Samsung SDI, the development of car manufacturers other than BMW is also an indispensable step in expanding the market share of EV batteries. Therefore, the company decided to acquire a car battery company.

In China, where the government has promoted EV adoption, LG Chem and Samsung SDI have also begun construction of battery factories. Although the outlook for the EV market is difficult to predict, South Korean manufacturers are still aggressively attacking even at a time when large-scale investments are needed.

What about the Japanese battery manufacturers? The Automotive Energy Supply (AESC), Jesse Yuasa and Panasonic, which supply lithium-ion secondary batteries for Nissan's EV "LEAF" (Leaf), have been vigorously developing EV batteries. In the period when EVs began to attract attention around 2010, there were other manufacturers trying to get involved. However, due to the time spent on EVs surpassing the original expectations, many manufacturers began to hesitate to develop and invest.

LG Chemicals, in close cooperation with European and American auto makers, has expanded the shipments of EV and PHEV batteries. Therefore, as mentioned at the beginning, many EVs and PHEVs of world-class automotive companies are actively using Korean manufacturers' batteries.

Under this circumstance, Panasonic took the lead and decided to invest in Tesla’s “super factory” for a giant lithium-ion battery plant that is being built in Nevada, USA. The plant plans to order Tesla to supply battery cells such as the EV "Model 3" battery pack, which will be available around 2017.

Test the potential of Japanese battery manufacturers

The Super Factory is a huge project that plans to invest a total of 4 billion to 5 billion U.S. dollars in huge funds by 2020. Tesla will work with parts and materials manufacturers to share the investment. The goal is to reduce the cost per kWh by more than 30% compared to the batteries currently used by Tesla's EVs. In order to overcome this big problem, apart from the mass production scale benefits, it is also inseparable from the progress of the battery unit itself. Panasonic will use the high-capacity lithium-ion secondary battery whose positive electrode is made of nickel to greatly improve its performance.

Japanese and South Korean manufacturers have been competing in semiconductors, flat panel TVs, and consumer lithium-ion batteries. There have also been many precedents in which Japanese manufacturers have been defeated by South Korean manufacturers. Then, can South Korean companies that have stepped up their offensive against batteries for EVs succeed in reversing the situation? It can be said that Japanese companies that once pioneered the development of the secondary battery market are now facing tests.