Korean battery makers losing share, now with less than quarter of market

Industry

Published: 09 Feb. 2023, 18:11 Updated: 10 Feb. 2023, 00:33

Korean battery makers losing share, now with less than quarter of market

EVs are being charged at a parking lot in Gangnam District, southern Seoul, on Oct. 31. [YONHAP]

Korean battery makers are losing share to Chinese competitors. They now have less than a quarter of the market, though that could change as the U.S. Inflation Reduction Act (IRA) kicks in.

LG Energy Solution, SK On and Samsung SDI held a combined 23.7 percent of the global EV battery market last year, down 6.5 percentage points from the year-earlier period.

Of the 10 largest battery makers in the world, six were Chinese companies. They held 60.4 percent of the battery market last year, compared to 48.2 percent in 2021.

Contemporary Amperex Technology's (CATL) battery supply nearly doubled to 191.6 gigawatt hours, for 37 percent of the market.

LG Energy Solution supplied 70.4 gigawatt hours of batteries, up 18.5 percent. Market share was down 6.1 percentage points to 13.6 percent.

LG Energy Solution barely maintained its No. 2 spot. BYD tied with LG Energy Solution with 13.6 percent. It only had 8.7 percent in 2021.

SK On was able to grab 5.4 percent of the market, the fifth-largest battery maker in the world after Panasonic. Samsung SDI had 4.7 percent, compared to 4.8 percent a year earlier.

“Since the implementation of the IRA, the Chinese makers such as CATL, BYD and CALB kickstarted to expand their presences in the global markets like Europe and Asia, outside of their domestic market,” SNE Research wrote in the recent report.

“The competition for global market share is expected to be heating up more.”

Analysts forecast that the situation will improve after 2025 when the battery makers have manufacturing facilities producing in the North American region.

“Korea’s battery makers will likely control 69 percent of the U.S. market by the end of 2025,” said Lee Anna, a researcher at Yuanta Securities.

“With the rules like the IRA that try to rule China out of the game, the growing EV orders in the U.S. market will inevitably raise the demand for batteries from Korean companies.”

Two Ultium Cells battery plants in the United States, in Tennessee and Michigan, are scheduled to start mass production in 2025. Ultium is a 50:50 joint venture between LG Energy and General Motors.

SK On and Ford’s three plants, in Kentucky and Tennessee, will begin production in 2025, while a Samsung SDI-Stellantis plant in Indiana is scheduled for 2025.

Korean EV makers are doing better than the battery makers.

Hyundai Motor and Kia delivered a total of 509,000 EVs in 2022, including plug-in hybrids, a 42 percent jump on year, according to data from SNE Research.

They held 11.9 percent of the global EV market compared to 10.6 percent a year earlier. They were No. 3 after Tesla and Volkswagen, though the data do not include sales in the Chinese market.

Last year, 99,727 Ioniq 5s and 83,411 EV6s were sold.

Tesla delivered 874,000 EVs in 2022, taking 20.5 percent of the market. Volkswagen was No. 2, selling 613,000 EVs and taking 14.3 percent of market, down from 18.1 percent the previous year.

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