Korean Companies' Market Shares Drop in Q1
Chinese electric vehicle (EV) battery manufacturers’ market share in their home turf is continuing to increase along with the use of LFP batteries, which are lower in performance but cheaper than NCM batteries. With an increasing number of automakers adopting LFP batteries, South Korean EV battery manufacturers are facing the need to change their NCM battery-centered strategy.
In the first quarter of this year, CATL accounted for 49 percent of the LFP batteries in EVs in China and BYD increased its market share to 34 percent. In the NCM battery market of China, CATL’s market share was as high as 51 percent whereas that of LG Energy Solution stood at 6 percent.
About half of the vehicles Tesla produced in that quarter come with LFP batteries, and Audi and BMW are planning to increase their use of LFP batteries. This is because the prices of EV battery materials, especially nickel, are soaring these days. Most of the material used in NCM batteries is supplied from a very small number of regions, including China and Russia. On the other hand, lithium, the main component of LFP batteries, is available in various countries.
South Korean EV battery manufacturers are responding by taking advantage of the weak points of LFP batteries, that is, low energy density, small battery capacity, and weight and area. For example, LG Energy Solution is continuing to improve its high-nickel NCMA batteries, in which the content of nickel is 90 percent for high performance and aluminum is added for cost reduction.
In the meantime, market research firm SNE Research said on May 2 that CATL and BYD accounted for 35 percent and 15.9 percent of the global EV battery usage in the first quarter of this year, respectively. The Chinese companies came in first and third and the usage of their batteries jumped 137.7 percent and 220.4 percent year on year, respectively.
In that period, the usage of LG Energy Solution batteries increased 39.1 percent to 15.1 GWh but its market share fell from 22.1 percent to 15.9 percent. SK On retained its fifth place with a share of 6.6 percent and the usage of its batteries increased 141.9 percent year on year to 6.3 GWh. Samsung SDI’s market share fell from 5.8 percent to 3.8 percent, although the use of its batteries increased 26.2 percent from a year ago. The three South Korean companies’ market share fell to 26.3 percent, down 6.9 percentage points from a year earlier.