South Korea moves to lead the new industry of batteries for electric vehicles

South Korea moves to lead the new industry of batteries for electric vehicles

Its top three manufacturers, LG Energy Solution Ltd, SK Innovation and Samsung SDI, supplied 31% of global batteries in the first half of the year

There has been a major shift in South Korea's approach to what is seen as a new, high-growth industry: electric vehicle batteries. It is positioning itself as a leader in the global electric vehicle supply chain. Its top three manufacturers, LG Energy Solution Ltd, SK Innovation and Samsung SDI, supply 31% of global batteries.

South Korea's battery industry is backed up by proactive government policies. They are also supported by investors who want to secure the future supply of raw materials for components.

The goal of phasing out combustion vehicle sales to reduce emissions has changed the landscape of the automotive industry. Vehicle and component manufacturers are replacing platforms to cope with new powertrains. And they are doing it in record time.

Currently, many governments offer incentives to purchase electricity to compensate for the high cost. However, costs are declining, thanks to improved supply chains and increased economies of scale. Consequently, the aid will decrease until it disappears.

Global EV sales are expected to be below 4 million units this year. It is still a small part of the approximately 90 million total vehicles expected to be sold worldwide. Therefore, a complete switch to electric vehicles will require a great deal of investment and restructuring.

Analysts expect those numbers to continue to grow, for electric vehicles. As for those with fuel cells, a notable increase is expected in the second half of the decade.

Obtaining sufficient volumes of batteries for electric vehicles is a major problem facing the automotive industry. The context is complicated. Vehicle manufacturers are rushing to sign multi-million dollar deals to secure long-term battery supplies. Meanwhile, battery manufacturers are faced with the problem of sourcing enough raw materials to allow this industry transformation to take place.

The world's largest manufacturer is Contemporary Amperex Technology Company Limited (CATL) of China, with an estimated global share of 31% in global sales.

The main manufacturers of batteries for electric vehicles in South Korea are LG Energy Solution Ltd, SK Innovation and Samsung SDI. All three are moving rapidly to meet the growing global demand for electric vehicle batteries.

According to South Korean research firm SNE Research: It is estimated that together they accounted for about 31% of global shipments of electric vehicle batteries in the first half of 2021.

South Korea moves to lead the new industry of batteries for electric vehicles

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