Korean media: The utilization rate of the top three battery manufacturers in South Korea is only 50%, what about Chinese companies?
On October 28, Korean media "Global Economy" published an article stating that Chinese battery companies lead the global market, surpassing the three major South Korean battery companies with low-cost lithium iron phosphate (LFP) batteries. The factory utilization rate of South Korean enterprises is only 50%, while the utilization rate of Chinese enterprises is as high as 90%, dominating the market.
It is reported that the factory utilization rates of the three major South Korean battery companies, LG Energy Solution, SK On, and Samsung SDI, are hovering around 50%, while the utilization rates of Chinese companies, CATL and BYD, are as high as 90% and they are operating at full speed.
With the global battery market competition rapidly shifting from high performance to price competition, South Korean companies are facing a crisis. Data from SNE Research shows that the market share of these three South Korean companies outside China decreased by 7 percentage points compared to last year, reaching 38%. The factory utilization rate of LG Energy Solution has been declining for four consecutive years. GlobalData, a research company, said, "As automakers adopt LFP for mass production, demand for high-end nickel batteries has shrunk to the luxury car and long-range high-performance vehicle markets."
The transformation of the battery market began in 2021. As Chinese companies massively expanded the production of nickel-manganese-cobalt (NMC) batteries, the prices of lithium, nickel, and cobalt surged, widening the price gap between NMC and LFP batteries, and leading the market to shift towards LFP. Rhodium Group explained, "Chinese LFP producers and NMC producers who can quickly change their production lines have quickly captured market share."
South Korean companies focused on high-quality nickel batteries for high-end electric vehicles, considering LFP technology to be at a disadvantage. However, with China controlling LFP production, the market shifted towards cheaper mass-market electric vehicles.
The dominance of the Chinese battery market is due to its massive production scale. According to data from Rhodium Group, China has 82% of the global battery manufacturing capacity.
CATL's scale reflects the power of Chinese manufacturing. CATL provides batteries for one-third of the world's electric vehicles, producing one battery cell per second, and a battery pack in 2.5 minutes. CATL operates 13 production facilities worldwide and has invested over 11 billion euros in building factories in Germany, Hungary, and Spain.
CATL stated, "We have invested more than 10 billion dollars in R&D, forming a team of over 20,000 researchers who hold or have applied for 50,000 patents worldwide." Chinese companies have gained an additional advantage through vertical integration, from owning lithium mines to manufacturing components.
Chinese companies also have technological advantages. CATL's new battery offers a driving range of 758 kilometers and can charge 478 kilometers in 10 minutes even in extreme cold weather.
Last year, South Korean manufacturers invested 1.7 billion dollars in R&D, setting a record high. However, this investment is negligible compared to the research capabilities of the Chinese ecosystem. In March, the International Energy Agency stated that the survival of South Korean manufacturers depends on whether they adopt cheaper LFP designs.
Original: www.toutiao.com/article/1847227441190912/
Statement: This article represents the views of the author.