EV Battery Competition
With a flurry of bad news about Samsung SDI breaking in the Chinese electric car market these days, it is expected that change will be made in the dynamics of the domestic electric car battery industry.
According to foreign media reports on October 3, JAC which temporarily suspended the adoption of Samsung SDI’s electric car batteries is planning to introduce MEB (Modular Electric Drive Kit), an electric car platform developed by Volkswagen as early as 2020.
“We will introduce MEB to JAC, FAW and SAIC,” said Jochem Heizmann, the CEO of Volkswagen China with reference to this in the Paris Motor Show held on September 29. FAW and SAIC are Chinese automakers which LG Chem is supplying its batteries to.
If JAC uses batteries of LG Chem or Panasonic, it will undermine Samsung SDI’s status in China. At present, Samsung SDI says that the company is supplying its products to JAC, Yutong and Foton. In the case of Yutong and Foton, both of which produce commercial vehicles such as electric buses, the Chinese government’s policies to suspend subsidies for MCN batteries significantly reduced their trade volume with Samsung SDI, said Samsung SDI during the announcement of its second quarter earnings.
By contrast, LG Chem is in a good mood. LG Chem’s total orders surpassed 36 trillion won while receiving 82 projects from 28 automakers. The company unveiled its plan to post seven trillion won in sales in 2020.
Observing LG Chem’s situation, it is highly likely that the company will maintain its relationship with Volkswagen. In July, Volkswagen announced that the company will team up with LG Electronics for the development of a connected car platform. In addition, recently, it was said that the German automaker was considering a joint project to build a battery factory with LG Chem or Panasonic by investing 1.7 billion to 2 billion euros.
In the meantime, SK Innovation, a latecomer, is rapidly increasing its competitiveness. SK Innovation raised its annual production capacity to 1GHw from current 0.8GHz by completing the expansion of the third line at the Seosan factory last month. Besides, the company is aggressively applying its spur to expansion in the market such as building a joint venture battery cell factory in China.