In-house Development
Global automotive companies are speeding up the process of battery internalization. Batteries account for about 30-40% of the cost of electric vehicles (EVs), making them a key component. If they are successfully developed in-house, significant price competitiveness can be achieved.
According to industry sources on June 12, automakers are focusing on procuring batteries through joint ventures with battery companies while also investing in in-house development.
Tesla is a prime example. Tesla recently secured a new site in Fremont, California, for the expansion of in-house production of its 4680 battery cells. This site is located near Tesla's existing 4680 cell pilot production plant. The industry expects Tesla to expand its 4680 in-house production using this new site. The 4680 battery, a cylindrical battery with a diameter of 46 mm and length of 80 mm, has five times the energy capacity, six times the output, and 16% longer range than Tesla's existing 2170 battery.
Tesla is also collaborating with Panasonic in Japan and LG Energy Solution for mass production of 4680 batteries. While battery companies are currently outperforming Tesla in terms of yield and technology, there are analyses suggesting that their position could be threatened if Tesla succeeds in mass production.
The Volkswagen Group is also actively internalizing batteries. PowerCo, the group's battery subsidiary, plans to employ up to 20,000 people by 2030. The aim is to greatly expand its current staff of about 1,000 to gain battery competitiveness.
In particular, it is actively recruiting from Asian battery companies, including CATL of China, to secure technical skills. PowerCo is preparing to operate factories in locations including Salzgitter, Germany; Valencia, Spain; and St. Thomas, Canada. Initially, the goal is to begin operations in Germany by 2025 and in Spain by 2026.
BYD has already become a company that manufactures both batteries and electric cars in-house. Starting as a battery company, it has succeeded in internalizing key EV components such as electric motors, vehicle semiconductors, and batteries. With competitive pricing, BYD surpassed Tesla to take first place in global electric vehicle deliveries from January to April of this year.
Hyundai Motor Company, the representative automaker in Korea, is also investing in battery development. In particular, Hyundai is planning to target the next-generation battery market rather than the lithium-ion battery market where existing battery companies are strong. The area Hyundai is particularly focusing on is Lithium Metal Batteries (LMBs). LMBs presuppose a solid electrolyte and batteries with a lithium metal anode. Hyundai's goal is to increase battery performance by 50% compared to 2021 and reduce the price by 40% by 2030, indicating that they may jump into the development of LMBs and others.
The Hyundai Battery Pre-Development Team is researching the next-generation battery materials, cells, design, and processes, and verifying the specifications of the next-generation batteries. Their goal is to gain long-term competitiveness by developing technology to overcome the limitations of existing lithium-ion batteries.