Excluded from Certification
Korean battery makers, LG Chem and Samsung SDI have failed to obtain the certification of electric vehicle batteries from the Chinese government. It suggests that the two companies will not be subsidized for electric car batteries from 2018 so that the prospects of their business in the country are very gloomy.
According to industry sources on June 20, the Ministry of Industry and Information Technology of the Chinese government recently made the fourth announcement of the certificated battery companies that have met the Chinese regulations. Unfortunately, however, Korean companies are not included in the list of the 31 certified battery makers. They are said to have not satisfied the regulatory rules prescribing the qualification process, including about documentation.
In view of discussions so far, the Chinese government will not offer subsidy for battery makers that fail to get the authorization starting January, 2018. If Korean battery makers do not receive the subsidy amounting to the half of the total price of a vehicle, they are likely to be faced with great barriers in that it is virtually impossible for them to sell their products in China. LG Chem and Samsung SDI in particular opened electric vehicle battery plants in Nanjing and Xi’an, respectively, last October prior to their expansion into the Chinese market. Under the circumstances, there will be a rugged road ahead of them.
The industry casts the doubt that Chinese government may try to hold Korean battery makers in check to protect Chinese rivals. Therefore, a negative outlook is coming out that the coming fifth battery certification process would be tougher. In addition, the industry even guesses that the failure of Chinese electric vehicle maker BYD to get subsidy in South Korea could give effect on the certification result in China. The result, however, came from the differences in regulations of the two countries.
The Korean battery makers said that they would come up with measures after they find out what effects the failure to get the certification will bring about. An official announcement will be made early next month.