South Korean media: South Korean batteries are retreating in the face of Chinese competition as global share falls from 30% to 19%!

On June 19, South Korean media JoongAng Ilbo published an article stating that electric vehicle batteries are listed alongside semiconductors and displays as one of South Korea's "three national advanced strategic technology sectors." However, recent developments are not optimistic.

According to a survey by market research firm SNE Research, this year's first quarter saw the three South Korean battery companies' global market share in the electric vehicle battery sector at only 18.7%, with LG Energy Solution at 10.7%, SK On at 4.7%, and Samsung SDI at 3.3%. These three companies have seen their global market share drop from 30% to 19% in just three years. In contrast, China's leading electric vehicle battery manufacturer CATL maintains an overwhelming first place with a 38.3% market share. Meanwhile,比亚迪, which also produces batteries for electric vehicles, holds second place with a 16.7% market share.

It is no secret that Chinese companies gain price competitiveness through "economies of scale." The real issue is that some analysts believe South Korea is giving away its advantages, such as quality competitiveness and technological leadership, to China. Park Jae-bom, senior researcher at POSCO Research Institute, stated, "Currently, lithium iron phosphate (LFP) batteries dominate the global rechargeable battery market, and China leads in terms of technology."

He added, "South Korea has been competing with NCM batteries, but due to entering the LFP battery production market late, it finds itself in a difficult situation."

NCM batteries were previously recognized as products with superior performance compared to lithium iron phosphate batteries. Composed of nickel, cobalt, and manganese, the cathode material of NCM batteries has high energy efficiency per unit area, increasing the driving range when installed in electric vehicles. LFP batteries use relatively easy-to-obtain metals like lithium and iron instead of scarce metals like cobalt and nickel, making their production cost lower than that of NCM batteries. This is the background behind China's focus on producing LFP batteries to enhance price competitiveness, despite their energy efficiency being only 60%-80% of NCM batteries.

However, later, the Chinese industry successfully improved the shortcomings of LFP batteries through the application of new technologies. Typically, during battery manufacturing, several basic cell units are combined into modules, which are then protected from external shocks, heat, and vibrations. These modules are reassembled into the final product, adding efficiency management systems or cooling systems. However, the Chinese industry applied the "CTP" technology to minimize space waste, eliminating traditional manufacturing stages' modules and directly assembling them into battery packs. This enhanced battery efficiency.

At the same time, the safety advantage of LFP batteries became evident, benefiting China. Chemically stable, LFP batteries do not explode even at temperatures exceeding 350 degrees Celsius, making their fire risk smaller than that of NCM batteries. A South Korean insider said, "LFP batteries are gaining attention because they are practical and suitable for safety-critical areas like electric vehicles and energy storage systems (ESS). If the energy efficiency issue is resolved, they will become very attractive."

While China gains both price and quality competitiveness in LFP batteries, it is also reinvesting in other new technologies, creating a virtuous cycle that continuously weakens South Korea's presence in the rechargeable battery market. Recently, CATL released a sodium-ion battery and announced plans to start mass production by the end of the year. Sodium-ion batteries are attracting attention as a promising new technology due to their cheaper raw materials, higher safety, and faster charging speed.

Original Source: https://www.toutiao.com/article/1835344845856780/

Disclaimer: The article solely represents the views of the author.