To Diversify Battery Suppliers

Renault Group has forged partnerships with new battery suppliers.

European automakers are major customers of Korean electric vehicle (EV) battery manufacturers. But they are diversifying their battery suppliers.

AESC, a battery manufacturer of China's Envision Group, will invest up to 2 billion euros to build a battery plant in France. The plant is aimed at supplying plenty of batteries to Renault Group of France.

Renault is planning to use AESC's batteries for low-end EV models. For premium EVs, it will use batteries from French startup Verkor. Renault will secure more than a 20 percent stake in Verkor for this purpose.

Renault has been purchasing batteries mainly from LG Energy Solution. Yet, it has chosen AESC and Becker as its major partners in its transition to EVs. As it has formed a new alliance, Renault is expected to lower its reliance on LG Energy Solution for battery supply.

Volvo, a carmaker in Sweden, also announced that it will establish a battery plant in collaboration with Swedish battery maker Northvolt. Volvo, which was acquired by China's Geely Holdings, has been a customer of LG Energy Solution and Samsung SDI. In particular, it signed a long-term contract with LG Energy Solution in 2019 to buy batteries for next-generation EVs.
 

Prior to this, Porsche, a customer of LG Energy Solution, announced on June 20 (local time) that it will establish a joint venture battery plant with German battery maker Customcells. The plant is expected to roll out 100 MW of batteries from 2024, a volume enough to power 1,000 EVs.

The European automakers’ moves are aimed at securing batteries in a stable manner ahead of their conversion to EVs. "The EV market is growing rapidly, and automakers are making every effort to stabilize their battery supply chains as a battery shortage is expected," said an industry analyst. "Diversifying suppliers will not hurt Korean battery makers."

However, Korean battery makers need to pay attention to Europe’s push for battery internalization. The EU is now offering massive support to increase its self-sufficiency in batteries.

"It is impossible to narrow a technological gap between European automotive and battery companies and Korean battery makers in a short period of time," said another industry analyst. “If Korean battery makers produce better products, they will be able to boost their competitiveness.”

Copyright © BusinessKorea. Prohibited from unauthorized reproduction and redistribution