Thirty-one electric vehicle (EV) models, or about 80% of all subsidized EV models in the United States this year, use Korean-made batteries, according to sources in the battery industry. This is an increase of 14 in seven months from 17 in April.
The 31 subsidized EV models in the United States as of that date were powered by batteries from LG Energy Solution, SK on, and Samsung SDI. The U.S. government is currently offering subsidies of up to US$7,500 to U.S. consumers who purchase qualifying EVs under the Inflation Reduction Act (IRA).
LG Energy Solution is supplying batteries to the largest number of EV models, 22. It supplies batteries for GM Cadillac and Chevrolet models as well as the Chrysler Pacifica, the Ford Mustang Mach-E (the extended and standard models), the E-Transit, and the Lincoln Aviator. LG Energy Solutions batteries go into the Tesla Model 3 Base, Long Range and Performance models, and eight Volkswagen EV models as well.
SK on supplies batteries for 10 EV models -- the Ford F-150 Lightning (the extended and standard models) and eight Volkswagen models. Volkswagen is reportedly buying batteries from both LG Energy Solution and SK on.
Samsung SDI is supplying batteries for seven models: the Audi Q5 Plug-in Hybrid Quattro, the Jeep Grand Cherokee and Wrangler, the Ford Escape, Lincoln Corsair, and the Rivian R1S and R1T. The Audi Q5 was just added to the list of subsidized EV models on Dec. 12.
What is also noticeable is the growing number of EV models powered by Chinese batteries. In fact, the Nissan Leaf S and Leaf S Plus, which were added to the subsidized EV mode list in late October, use batteries from Chinese battery maker AESC. AESC was founded by Japan’s Nissan Motor Co. and was acquired by China’s Envision Group in 2019. In addition, battery industry insiders believe that the German EV model BMW X5, which entered the subsidized EV model list in June of this year, is loaded with batteries from Chinese battery maker CATL.
Some of them have voiced concern that the situation should be closely checked. The reason is that EVs with relatively cheap Chinese lithium-iron phosphate (LFP) batteries can undermine the price competitiveness of EVs powered by Korean-made batteries by receiving subsidies.
However, those in the Korean battery industry are not very concerned about it. The United States recently announced the details of its FEOC regulations. An FEOC stands for a foreign entity of concern. The details say that the U.S. government will not subsidize EVs using battery joint ventures in which Chinese companies have a more than 25% stake. Therefore, Chinese battery-powered EVs are unlikely to be eligible for subsidies in the future. To become eligible for subsidies, battery components must not be sourced from FEOCs starting from 2024 and battery core minerals starting from 2025.