China’s slowdown a boon for local battery makers

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China’s slowdown a boon for local battery makers

Three Korean companies captured a combined 30 percent of the global market for electric vehicle (EV) batteries in January, according to a global engineering research firm - a first, although the gains resulted mainly from a slowdown among Chinese manufacturers.

Global shipments of the batteries declined overall in January, dropping 6.2 percent on year to 7.3 gigawatt hours, according to the report from SNE Research.

LG Chem, Korea’s largest electric vehicle battery manufacturer, moved up the ranks to the No. 2 spot globally.

The Korean company’s battery shipments grew 137.4 percent from a year earlier. A year earlier, CATL topped the list while LG had come in fourth.

The most recent report showed Osaka, Japan-based Panasonic had become the world’s top battery manufacturer, after a 125.7 percent on-year jump owing to the success of the Tesla Model 3.

Most Chinese battery makers on the top 10 list experienced on-year declines. Since last year, the Chinese government has been gradually reducing subsidies for electric vehicles with the goal of completely abolishing them by 2021.

China’s CATL, for example, was the largest electric vehicle battery manufacturer for the entire year of 2019 with a 27.9 percent market share, according to the research firm.

By January it had fallen to third, with a 21.8 percent share. And BYD, based in Xi’an, China, dropped to sixth place from the No. 2 position in January 2019.

Korean companies, on the other hand, experienced year-on-year shipment increases in January, with shipments by LG Chem and SK Innovation having both doubled.

Samsung SDI’s January shipments rose 22.7 percent. The company had the fourth-highest number of shipments, although it remained well behind the top three battery makers. Each of those companies had more than four times the shipment volume of Samsung SDI.

SK Innovation’s shipments jumped 110.7 percent from the same period last year, making it the world’s seventh-largest EV battery maker in January, up five ranks on year.

Monthly market shares for all three Korean companies expanded significantly from last year. Combined, their global market share totaled 30.7 percent, compared with just 14.2 percent in January 2019.

SNE Research anticipates Korean companies’ shipments will expand further this year.

However, the research firm also forecasts a rebound in the Chinese market and consequently a rebound for the country’s electric vehicle battery makers.

“Chinese companies will surely make a comeback, and Japan’s Panasonic will likely maintain strong performance - it’s hard to predict sustained favorable market conditions for Korean companies,” the report’s authors wrote.

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