Korea's EV battery makers go cylindrical

Industry

Published: 15 Jul. 2022, 14:12

Korea's EV battery makers go cylindrical

An LG Energy Solution worker holds the company's cylindrical batteries at the Ochang plant in North Chungcheong. [LG ENERGY SOLUTION]

With more global carmakers choosing cylindrical batteries for electric vehicles (EVs), local battery makers are scrambling to ramp up their production of them.

The competition is likely to intensify between LG Energy Solution and Samsung SDI, two of Korea's three major battery makers. SK On doesn’t make cylindrical batteries.

Cylindrical batteries are cheaper to produce than pouch or prismatic-type batteries. They have better temperature control, which reduces the risk of fire.

Global carmakers including Tesla and BMW have chosen cylindrical batteries as the batteries for their future EVs. Tesla previously announced that it will use the “4680” cylindrical battery, which indicates batteries that are 46 millimeters in diameter and 80 millimeters in height. They have a higher energy density than existing batteries, reducing battery costs by 50 percent.

LG Energy Solution is one of Tesla's main battery suppliers. In mid-June, LG said it will spend around 580 billion won ($440 million) to build cylindrical battery lines in its Ochang plant in North Chungcheong to make 4680 battery cells with an annual capacity of 9 gigawatt-hours.

The batteries will be supplied to Tesla starting in the second half of next year.

The company also bought a site in Queen Creek, Arizona, to build an 11-gigawatt-hour factory for cylindrical batteries. It initially said the company would invest a total of 1.7 trillion won in the plant, though the size of the investment is under review.

Samsung SDI is developing its own cylindrical batteries 46 millimeters in diameter. The height of the battery has not been decided yet.

“Though Samsung SDI has not decided the height yet, it is certain that the company is targeting Tesla, the unrivaled No. 1 EV maker in the global market,” said Lee Ho-geun, an automotive engineering professor at Daeduk University.

Samsung SDI's cylindrical batteries [SAMSUNG SDI]

Industry analysts say BMW could be a customer for Samsung SDI's cylindrical batteries.

Samsung SDI CEO Choi Yoon-ho recently accompanied Samsung Electrics Vice Chairman Lee Jae-yong on a business trip to Europe. Choi and Lee held a meeting with Oliver Zipse, chairman of BMW.

Samsung SDI is building a facility for pilot production of 4680 cylindrical batteries in its Cheonan plant in South Chungcheong. It is also considering additional investment in its Seremban plant in Malaysia, though no details have been announced.

“Due to recent fire issues with the pouch-type batteries, cylindrical batteries are regaining attention,” said Daeduk's Lee. “It will be the next big thing in the EV battery industry for a while.”

This year, cylindrical batteries will account for 19 percent of the global EV battery market, according to SNE Research, which is expected to grow to 26 percent in 2030. During the same period, the share of prismatic-type batteries will decrease from 55 percent to 43, while pouch-type batteries will increase from 26 to 31.

BY SARAH CHEA [chea.sarah@joongang.co.kr]