Kona EV Fires Driving a Wedge
The Ministry of Land, Infrastructure and Transport and Hyundai Motor are mentioning LG Chem’s battery cells as the cause of Kona Electric fires despite LG Chem’s denial. Under the circumstances, the two companies’ 20-year partnership is in jeopardy.
They co-developed secondary batteries as early as 18 years ago, when Hyundai Motor was working on hybrid vehicles. LG Chem joined the development of Hyundai Motor’s first electric car i10 and its first mass-market electric car Ioniq. At present, most Hyundai Motor electric cars are equipped with LG Chem batteries. Hyundai Mobis and LG Chem have run their battery pack manufacturing joint venture, HL Green Power, since 2010. It is one of few joint ventures between South Korean conglomerates.
Their ongoing disputes over the cause of the fires, however, are predicted to seriously affect the very close partnership. This is because whether the cause is battery cell defects or car design defects will determine which will flourish in the fledgling electric vehicle market.
Some experts are focusing on the fact that the LG Chem battery supply to Hyundai Motor began to decrease before the fires came to the surface. According to them, the automaker began to reduce its dependence on LG Chem after the first Kona Electric fire report in 2018. The Genesis G80 EV, which is scheduled to be launched next year, comes with SK Innovation batteries. In addition, SK Innovation is the primary battery supplier for Hyundai electric vehicles to be released based on its dedicated e-GMP platform. Although LG Chem has been selected as the secondary, it is no longer an exclusive partner.
LG Chem, in the meantime, is working on collaboration with multiple global automakers. It set up joint ventures for battery supply with Geely Auto and GM last year and it is currently building factories to that end in China and the United States. In South Korea, it was said that LG Chem and Hyundai would establish a similar joint venture in Dangjin. Now, however, the possibility is dwindling.