Hyundai and Kia go on a big Chinese EV battery binge

Home > Business > Industry

print dictionary print

Hyundai and Kia go on a big Chinese EV battery binge

Computer-generated image of Hyundai Motor's Ioniq lineup. [HYUNDAI MOTOR]

Computer-generated image of Hyundai Motor's Ioniq lineup. [HYUNDAI MOTOR]

Hyundai Motor and Kia will be buying more Chinese-made batteries for use in their electric vehicles (EV), as the prices are lower than those from Korean competitors and the quality of the batteries has improved greatly.  
 
The companies have chosen CATL, a Ningde, China-based battery manufacturer, and SK Innovation as battery suppliers for the third batch of EVs to be produced on their EV-dedicated modular platform E-GMP, according to industry reports Monday.
 
BYD, a Chinese battery maker based in Shenzen, is also reportedly in talks with Hyundai Motor to be a supplier for the third batch, which will be models manufactured on the E-GMP after 2023, including Hyundai Motor’s Ioniq 7 and other Kia EV models.  
 
The purchases may total 9 trillion won, and CATL is set to get half of that business.  
 
CATL has been fortifying its relationship with Hyundai Motor lately. It and LG Energy Solution were chosen as the battery suppliers for the second batch of EVs, which will include models made in 2022, such as the Ioniq 6. The deal is worth 16 trillion won.
 
For the first batch of E-GMP EVs, which will include the Ioniq 5, SK Innovation has been chosen as the sole supplier, responsible for a deal worth 10 trillion won.
 
Hyundai Motor has had close relationship with LG Energy Solution, having installed its batteries in all EV models released to date including Kona Electric. Kia has the same type of partnership with SK Innovation. The status quo could be shaken up with the aggressive addition of Chinese suppliers to the mix.  
 
The latest surge of Chinese battery makers in Korean-made EVs is largely related to cost, experts say.  
 
“Although there isn’t an official numerical figure to compare the price of Korean and Chinese batteries, Chinese batteries are known to be cheaper even when the shipping fee and possible tax are included,” said Kim Gwi-yeon, an auto analyst from Heungkuk Securities.
 
“It was a question about quality in the past, but the technology gap with Korean batteries has narrowed.”
 
When entering Chinese EV market, the world’s biggest, Chinese batteries in their EV models will qualify Hyundai Motor and Kia to receive local subsidies and tax benefits, further enhancing price competitiveness.  
 
“Although Hyundai Motor hasn’t revealed plans of bringing their EVs based on E-GMP to China yet, they will inevitably have to enter the market considering its market size,” said Lee Hang-koo, a senior researcher at Korea Automotive Technology Institute. “When considering that, expanding Chinese battery suppliers would be like a backup plan.”
 
CATL was the world’s biggest supplier of EV batteries last year, accounting for 24 percent of the market, shipping 34.3 gigawatt-hours equivalent of EV batteries, according to SNE Research. LG Energy Solution came in second, accounting for 23.5 percent. Samsung SDI delivered 5.8 percent and SK Innovation 5.4 percent.  
 
Hyundai Motor and Kia together plan to introduce 23 EV models by 2025, selling 1 million units of them globally.  
 
BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]  
 
 
 
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now