Battery makers need to take on Chinese, Japanese

[YONHAP]

With LG Energy Solution and SK Innovation ending their two-year legal war over technology, Korea's battery makers have to concentrate on catching up with rivals in China and Japan.

The world's top players in electric vehicle (EV) batteries are divided among those three Asian countries. Competition is fierce given the growth of the EV battery market, which is expected to reach 100 trillion won ($89 billion) in size by 2023.

While LG and SK were fighting each other in courts in the United States and Korea, China’s CATL increased its share of the market.

According to market research firm SNE Research, LG Energy Solution’s global market share in January and February retreated to 19.2 percent from 26.6 percent a year earlier.

CATL's jumped to 31.7 percent in the same period from 17.3 percent a year earlier. That makes it No. 1 in the world, up from No. 3 a year earlier. CATL’s battery shipments in January and February increased 272.1 percent on year.

Other Chinese companies in the top 10 list — BYD, CALB and Guoxuan -- also increased market shares compared to a year earlier, posting on-year growth in shipments between 153 and 1,384 percent.

Samsung SDI and SK Innovation maintained their positions at fifth and sixth place in January and February.

“’K-Battery’ wasted time as LG and SK carried on with their high-profile battle,” said Park Chul-wan, Sogang University professor of automotive engineering and secondary batteries.

“In the meanwhile, Chinese companies succeeded in reaching meaningful tech milestones like developing the cell-to-pack (CTP) and the cell-to-car (CTC) battery systems.”

CTP and CTC batteries both come in the form of small steel boxes, whereas LG and SK have focused on pouch-shaped batteries. The global trend is shifting towards prism-type batteries, which offer more flexibility in designing electric vehicles.

Last month, German carmaker Volkswagen (VW) announced plans to adopt a standard battery cell that would be used across different EVs in a Power Day event in which it shared its battery strategy. The battery was to be a prismatic cell, which looks like a steel lunch box, and industry analysts are speculating over whether China CATL will partner with VW to develop it.

China’s BYD is leading the industry in the “blade battery” which can be unfolded in the form of a flat rectangular plate. This design is a space-saver.

Japan’s Panasonic and automaker Toyota are developing a solid-state battery that replaces liquid electrolytes with a solid material. This reduces the risk of fire and will enable a car to run longer distances on a charge.

LG Energy Solution and SK Innovation are both leaders in pouch-type batteries. Last year, LG started a joint venture with General Motors while SK is in the middle of building a massive battery plant in the U.S. state of Georgia from which it will supply Ford and Volkswagen.

“The agreement between LG and SK has significance in that it cleared uncertainties regarding pouch-type batteries in the U.S. EV market,” said Professor Park. “The reconciliation should be the start of a win-win relationship in which the two could collaborate on developing pouch-type batteries they could both use.”

LG Energy Solution is developing technology for Tesla’s next-generation 4680 battery cell. Measuring 2.1 millimeters in diameter and 70 millimeters in height, the cylinder-shaped battery cell is expected by industry watchers to come with higher energy density and shorter time for production.

SK Innovation is developing technology in high-nickel batteries, where nickel, cobalt and manganese replace lithium ions. Nickel takes up 90 percent of the composition, while cobalt and manganese account for 5 percent each.

“Toyota has announced it will mass produce solid-state batteries in 2025 but Korean companies are more advanced in terms of technology. We’ll be able to win back leadership in the market,” said analyst Kim Hyun-soo from Hana Financial Investment.

BY KIM YOUNG-JU [song.kyoungson@joongang.co.kr]