To Compete with Korean Battery Makers
Northvolt has succeeded in developing a cylindrical battery with a diameter of 21 mm and a height of 70 mm and is preparing to mass-produce it. Competition in the cylindrical-type batteries is expected to intensify, as Korea's LG Energy Solution and Samsung SDI are also focusing on them.
Northvolt unveiled its new 2170 battery through its recently published 2021 Sustainable Management Report and its website. It has also adopted the brand names for its existing prismatic and new cylindrical products -- “Ling on berry Power” for cylindrical batteries and “Ling on berry Life” for prismatic products.
Established in 2016, Northvolt has grown based on strong support from Volkswagen Group, which wanted to reduce dependence on batteries from Asia. Northvolt’s corporate customers include Volkswagen Group, BMW Group and Volvo.
The development of a cylindrical battery was initiated at the request of Volkswagen Group, which owns a 20 percent stake in Northvolt. Volkswagen is the only cylindrical battery customer secured by Northvolt. Volkswagen is expected to use cylindrical batteries from 2025. Accordingly, Northvolt’s cylindrical battery mass production is expected to proceed in line with Volkswagen Group’s schedule.
The global cylindrical battery market is led by three companies -- LG Energy Solution, Samsung SDI, and Panasonic. Among the three, Samsung SDI is expected to feel the impact from Northvolt most acutely. Samsung SDI is a cylindrical and prismatic battery manufacturer. Samsung SDI and Northvolt share the same product lineup. Their corporate customers are significantly overlapping. Most of Northvolt’s customers are also customers of Samsung SDI. As a result, competition between Samsung SDI and Northvolt is expected to intensify.
Northvolt’s success in developing a 2170 cylindrical battery does not mean that it has the same level of technological power as that of the three companies. LG Energy Solution and Panasonic are preparing to supply 4680 batteries to Tesla. Samsung SDI has finalized the diameter of its next-generation cylindrical battery at 46 mm and is fixing its height through discussions with customers. Unlike the three companies, Northbolt has only completed the development of a 2710 model that the three companies are currently selling.
Korean battery experts believe that Northvolt will not be able to narrow its technology gap with the Korean battery companies in a short period of time. Nevertheless, they agreed that Northvolt and the Korean battery companies will continue to compete for battery orders.
European countries and automakers based in Europe are seeking to foster battery companies in the region. Starting with Northbolt, new battery makers have emerged in Europe, including Britishvolt in the U.K., ACC in France, and Italvolt in Italy. These new companies are rushing to mass-produce batteries.
"While the number of competitors has increased, this doesn’t necessarily mean that Korean battery companies are facing a big trouble is facing,” an industry analyst said. “European carmakers are partnering with European battery makers to secure a stable battery supply chain and induce price competition. Now that the electric vehicle market is rapidly expanding, battery sales will not dwindle.”