Flexible Competition
Tesla, a leader in the global electric vehicle (EV) industry, is building large-scale lithium-ion battery manufacturing facilities in Nevada with Panasonic. The plant is put into operation next year and its annual production capacity is to be increased to 50 GW in 2020. In the meantime, LG Chem and Samsung SDI are also gearing up, and their competition is expected to take shape within a few years.
In fact, their rivalry is already heating up in the home battery market. LG Chem announced on April 22 this year that it would release batteries for home use with Eguana Technologies. The two companies are going to develop less expensive home batteries allowing easy installation and launch them in North America in the third quarter of this year.
On April 30, Tesla unveiled its first home battery, the Powerwall. The wall-mounted battery can store up to 10 kW of energy and is priced at approximately 4.4 million won, including the installation cost. It is said that Tesla obtained more than 38,000 pre-orders just a week before the release date.
The global home battery market is predicted to grow from 430 billion won (US$388 million) to 3.5 trillion won (US$3.2 billion) in size between this year and 2020. Battery manufacturers are focusing on huge growth potential, although it is still a small market.
In the meantime, Korean companies are trying to solidify their dominance in the EV battery market. LG Chem, which has supplied about 400,000 batteries to GM, Renault, Ford, Volkswagen, Audi, Daimler, and many more, is predicting that the competition will become much more intense next year, with the growth of the global green car market accelerated based on tighter exhaust emissions and fuel economy regulations. The battery division of LG Chem is aiming to record 3.15 trillion won (US$2.84 billion) in sales this year to post year-on-year growth of at least 10 percent. In this context, it is planning to build battery manufacturing facilities with an annual capacity of 100,000 units in Nanjing, China.
Samsung SDI’s EV battery factory in Xi’an, which has an annual capacity of at least 40,000 units, is scheduled to be opened in the second half of this year. SK Innovation, which is currently expanding its plant in Seosan, South Chungcheong Province from 300 MWh to 700 MWh, is planning to form more partnerships based on those with Hyundai Motor, Beijing Automotive, and Daimler Groups.
An EV battery has to be compact in size, ensure a high level of safety, and have a long duration. Companies around the world are striving to meet requirements by means of R&D. LG Chem recently announced that it would make a battery that could power a car for 320 kilometers once fully charged to commercial use within a few years.
LG Chem has a high level of cost competitiveness in that it is the only chemistry-based company among major battery manufacturers. It has successfully worked on safer separation membranes, stack & folding techniques for higher energy density, pouch-shaped batteries adaptable to various vehicles and providing a long service life, and other refinements.
Samsung SDI acquired the EV battery pack business unit of Magna Steyr in February this year. The idea is to better penetrate the European and North American markets by adding Magna Steyr’s capabilities to its competitive edge in the battery cell and module segments. Samsung SDI has recorded the highest share in the global small-sized secondary battery market for five years in a row. Now, it is expanding the scope of its business to cover electric tools, electric bicycles, and the like to find new markets. It unveiled the world’s first flexible battery last year, which is expected to be used in a variety of wearable gadgets.
According to market research firm B3, Korean companies including LG Chem and Samsung SDI accounted for 49.5 percent of the global EV battery market in 2014, while Japanese companies used to represent more than 80 percent of the market until as recently as 2011. Last year, the former outperformed the latter, for the first time ever, by a margin of 0.6 percentage points.