Korean EV Battery Makers Outclassed by Chinese, Japanese Companies

Amid intensifying competition in the global electric vehicle (EV) battery market, Korean companies such as LG Chem and Samsung SDI are suffering big drops in shipment and market share standings due to the rapid growth of Chinese companies.

According to EV battery shipment data released by market researcher SNE Research on August 2, LG Chem's shipments totaled 2762.6MWh in the first half of this year, up 37.5 % from a year earlier. In the same period, Samsung SDI’s shipments also swelled 29.2% from 1033.2MWh to 1335.3MWh.

However, Korean companies’ shipment growth fell short of that of the global market. As a result, they suffered drops in the shipment, growth and market share standings. During the first half of this year, total EV battery shipments worldwide surged 84.3% year on year to 29.9GWh. In particular, shipments from Chinese manufacturers CATL and BYD ballooned 324.4% and 124.6%, year on year, respectively, thanks to the Chinese government's support.

As a result, LG Chem and Samsung SDI, which ranked second and fifth in shipments in the first half of 2017, slid to fourth and sixth place, respectively in the first half of this year. The rapid growth of Chinese companies significantly undermined Korean companies' market shares. LG Chem's market share sank from 12.4% to 9.2%, while Samsung SDI's from 6.4% to 4.5% during the same period.

"Total shipments of batteries for electric cars worldwide in the first half of this year surged 84.3% year on year but the growth of Korean shipments fell short of the market average," SNE Research said. "We will increase the gap with Chinese companies through investment and technology development and maximize shipments when the commercial electric vehicle market will fully bloom," said an official of a Korean battery company. LG Chem is building its second electric vehicle battery plant in Nanjing, China by investing up to US$2 billion.

Meanwhile, Japan's Panasonic, which exclusively supplies batteries to Tesla, an American electric car company, took first place in the first half of this year with shipments of 5940.4MWh. Panasonic lost its number one position to CATL in May. Yet commercial electric vehicle sales in China plummeted 34.8% year on year in June, placing CATL second after Panasonic.

Third place was claimed by China’s BYD (3270.9MWh), and Japan’s AESC (1771.8MWh) placed fifth. BYD, like CATL, enjoys benefits from the Chinese government's subsidies for commercial electric vehicles. Shipments of Japan’s AESC increased sharply as sales of the third-generation model of the Nissan Leaf surged. AESC is a subsidiary of Nissan.