Chinese and European electric vehicle battery makers are in a fierce pursuit with government support

Input 2020.12.31 14:00

Battery companies in China and Europe have been fiercely pursuing Korea, with full support from governments. ‘K Battery’ has reached its heyday, so that one out of three electric vehicles in the world uses batteries from domestic companies this year, but it is evaluated that it cannot be relieved due to fierce competition around the world. China is injecting large amounts of subsidies to related industries with the goal of becoming a’world battery factory’, and Europe is also raising the production capacity of its own companies based on the battery alliance created under the leadership of the European Commission.

According to the results of SNE Research on the 31st, CATL, a Chinese battery maker, recorded 28.1 GWh (gigawatt hours) of battery usage for electric vehicles worldwide from January to November this year, accounting for 24.2% of the total usage. It won the global No. 1 position for 3 consecutive months. LG Chem (051910)The company achieved first place in March this year, but gave it first place to China from September, and recorded 26.4 GWh of cumulative usage until November, accounting for 22.6% of the total usage. Panasonic Japan ranked 3rd with 22.3GWh (19.2%). Samsung SDI (006400)Wow SK innovation (096770)They ranked 4th and 5th with 6.8GWh (5.8%) and 6.5GWh (5.5%), respectively.

Chinese battery makers, including CATL, continue to widen the gap with domestic companies, with strong support from the Chinese government. The battery usage gap with LG Chem widened from 0.3GWh in September this year to 1.8GWh in November. CATL started supplying batteries to Tesla Model 3 sold in China from the second half of this year, increasing its market share in China to 50%. In addition, the Chinese government recently extended its EV subsidy support policy for another two years. Chinese makers can expand orders to electric vehicle makers around the world with price competitiveness.

European battery makers are also speeding up battery self-sufficiency with full support from the EU. The European battery market has emerged as a vein with guaranteed growth potential due to the surge in demand for electric vehicles according to eco-friendly policies. According to the production plan of the electric vehicle battery industry, production capacity in Europe is expected to reach 315 GWh within the next five years, soaring more than 15 times last year.

The EU Commission and each European government have a sense of crisis over the high dependence on batteries made in Korea and China, and have formed the’Battery Alliance’, an industry promotion policy, to foster the battery production chain. Swedish startup North Volt, funded by Volkswagen and BMW, plans to mass-produce batteries with low greenhouse gas emissions using hydroelectric power in Sweden starting next year, and is setting up a joint plant with Volkswagen in Salzgitter in northern Germany.

PSA, a French automobile giant, also decided to establish a joint venture with Saft, a subsidiary of the oil company Total and a battery manufacturer, to build factories with a scale of 24 GWh in France and Germany. The project of Northbolt and PSA is supported by the European Commission and the German and French governments.

Domestic companies, driven by competition, plan to strengthen their business competitiveness by actively expanding R&D and facility investments in order not to be cut off on the global stage. The three domestic battery companies have endured massive deficits and invested heavily in electric vehicle batteries. As a result, the market share of the three companies in the global battery market was 33.9%, which doubled from 16.6% in the same period last year.

Investment continues to grow. The cumulative R&D investment costs of the three domestic companies in the third quarter of this year amounted to about 1.56 trillion won, up 7.2% from the same period last year. Combined with the figures up to the fourth quarter of this year, R&D expenses are expected to exceed 2 trillion won. An industry insider said, “This year, Korean companies with technology superiority over competitors have made progress in the global battery market, but the global stage is gradually becoming a’tilted playground’ with the full support of each government.” “We are prioritizing R&D investment with the conviction that we need to widen the technology gap further.”