Seeking to Win Orders from European Carmakers
Korea’s three major battery makers, which have announced massive investment plans for the United States, are shifting their focus to Europe. They are looking to secure an edge with next-generation batteries in a price war with Chinese battery companies.
As the three battery companies have decided to invest trillions of won in joint ventures with major U.S. automakers, they need to take more battery orders from Europe to maximize profits.
The key is competition with Chinese battery companies. China’s CATL, the world's largest battery company, is building a battery plant in Germany for commercial operation from 2022. CATL produces prismatic batteries and is expected to focus on expanding orders from Volkswagen. In March, Volkswagen announced that it would increase the proportion of prismatic batteries to 80 percent by 2030.
Industry insiders predict that Samsung SDI and CATL will compete fiercely in the prismatic battery sector. Samsung SDI is betting on Gen. 5, a next-generation prismatic battery to be used for BMW electric vehicles.
SK On, which has been focusing on pouch-type batteries, is speeding up the development of prismatic batteries.
Major European automakers such as Daimler, BMW and Volkswagen are placing battery orders worth tens of trillion won to secure batteries for their vehicles to be launched after 2024.
Much attention is being paid to the competition between Korea and Japan over Tesla's Gigafactory in Germany, which will go live as early as November. Tesla is planning to mass-produce electric vehicles loaded with next-generation cylindrical battery “4680” beginning from 2022. The 4680 battery, which means 46mm in diameter and 80mm in length, will feature five times more energy density, six times more output, and 16 percent more mileage compared to conventional batteries.
Tesla announced its own production plan for the battery. But considering the production capacity of its battery plant, the electric car giant is likely to outsource a significant portion to outside companies. Japan’s Panasonic, LG Energy Solution, and Samsung SDI are speeding up technology development to win orders from Tesla. Panasonic has been cooperating with Tesla since the early development stage and is planning to start test production in March 2022.