Western battery setbacks ignite fierce S. Korea-China battery rivalry
Western battery setbacks ignite fierce S. Korea-China battery rivalry Germanys subsidy revival expected to boost European EV sales
www.chosun.com
Western battery setbacks ignite fierce S. Korea-China battery rivalry
Western battery setbacks ignite fierce S. Korea-China battery rivalry Germanys subsidy revival expected to boost European EV sales
www.chosun.com
Western battery setbacks ignite fierce S. Korea-China battery rivalry
Published 2024.09.24. 11:04According to industry sources and reports on Sept. 24, Volvo Trucks has decided to delay the construction of a new battery plant in Sweden by one to two years. Initially planned for next year, the project has been postponed despite Volvo Trucks holding a 56.9% share of the European electric truck market. The Wall Street Journal (WSJ) reported that global electric truck orders have declined for five consecutive quarters.
In a related development, the Italian government has announced plans to redirect €200 million (approximately 300 billion won) in subsidies, originally intended for the Stellantis-Mercedes-Benz EV battery plant, to other projects. This decision follows the halt of construction on the joint plant in June. Stellantis, in partnership with Mercedes-Benz and TotalEnergies, had planned to establish three gigafactories in France, Germany, and Italy under a joint venture Automotive Cells Company (ACC). Currently, only the French plant is operational, with the German and Italian factories on hold.
Northvolt, Europe’s largest battery manufacturer, is also undergoing restructuring due to the challenging conditions in the EV market. The company is reassessing its growth strategy after the cancellation of a €2 billion (approximately 3 trillion won) battery supply contract with BMW. A battery industry representative commented, “With the significant drop in battery prices, it has become increasingly challenging for Western newcomers, who lack manufacturing experience, to enter the market.”
As Western companies’ expansion plans falter, competition between South Korean and Chinese firms in the European battery market is expected to become more intense. According to global market research firm EV Volumes, the combined market share of the three major South Korean battery manufacturers (LG Energy Solution, Samsung SDI, and SK On) in Europe was around 70% in 2020 but has since dropped to 50% during the January to July period of this year. Meanwhile, Panasonic’s share has plummeted from 15% to 2%.
During this same period, China’s CATL and BYD saw their combined market share rise from 10% to 42%. Han Byung-hwa, an analyst at Eugene Investment & Securities, noted, “While South Korean battery companies have secured a strong position in the U.S. market, their current challenge is to defend their European market share against Chinese competitors.”
South Korean companies are planning to focus on the mid-to-low price segment of the European market. LG Energy Solution and SK On are set to introduce high-voltage mid-nickel batteries with a higher manganese content, while Samsung SDI is gearing up to promote its LFP+ batteries, which feature new electrode technology and incorporate manganese into LFP batteries.
EV sales in Europe have fallen by approximately 4% year-on-year as of last month, primarily due to the termination of subsidies in Germany, the largest consumer market. However, recent reports indicate that the German government is considering reintroducing subsidies, offering €6,000 (approximately 8.94 million won) for new EVs and €3,000 for used EVs when old internal combustion engine vehicles are scrapped. This move is anticipated to revive the market’s growth trajectory starting next year.
A market researcher commented, “The downturn in the European market began with the reduction and elimination of German subsidies last December. The reintroduction of subsidies could be a pivotal moment for the market, and there is a growing likelihood that major countries will resume policy support to prevent further deterioration of the business environment for European EV manufacturers.”
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