Volkswagen is’square’ and Tesla is’cylindrical’… Competition for’battery standards’ for electric vehicles

Input 2021.03.18 16:07 | Revision 2021.03.18 16:19

Volkswagen announced that it will expand the application of’square battery’ to its electric vehicles, and LG Energy Solutions, which produces’pouch-type batteries’, SK innovation (096770)Analysis comes out that this will be hit. Batteries for electric vehicles are divided into square, cylindrical, and pouch-type batteries, but the battery they prefer is different for each automaker. Volkswagen, which has been supplying pouch-type batteries from LG Energy Solutions and SK Innovation, suddenly changed its route and chose a prismatic battery.

According to market research firm SNE Research on the 18th, last year’s electric vehicle battery market share was in the order of square (49%), pouch type (27.8%), and cylindrical (23%). The rectangular battery chosen by Volkswagen is in the shape of a square can, and thanks to the aluminum metal exterior surrounding the battery, it is more resistant to external shocks than a pouch type battery and is more durable and safer. China CATL, BYD and Samsung SDI (006400)Etc. are producing prismatic batteries.

Industry analysts say that Volkswagen decided to introduce prismatic batteries, which Chinese battery manufacturers are focusing on, to cut costs and target the Chinese market, which accounts for about 40% of the company’s sales. Batteries are a key component that accounts for about 30% of electric vehicle production costs, and battery prices must be lowered to grow the electric vehicle market. The prismatic battery has a simpler manufacturing process compared to the pouch type, so it is possible to reduce costs when mass-produced. However, due to the metallic appearance, it is heavy and it is difficult to dissipate heat, so a cooling device must be attached.

The pouch-type battery that LG Energy Solution and SK Innovation are focusing on can be made into various sizes and shapes because it is placed in a thin vinyl pocket. Since it is made by stacking the battery materials layer by layer, the energy density is higher because the space can be used more tightly than the prismatic battery in which the materials are rolled up and placed in a can. From the perspective of a finished vehicle, customized batteries can be ordered for each vehicle, but the production cost is high because standardization is not easy due to the nature of the absence of a fixed design. Thermal management is also difficult due to the small amount of idle space.

The cylindrical battery that Tesla insists on is the oldest battery technology. In the past, it was used in electronic devices such as mobile phones and laptops, but Tesla expanded its scope by choosing it for electric vehicles. Cylindrical batteries have the advantage of being able to mass-produce in a standardized size, so the cost burden is the lowest. However, the disadvantage is that the space utilization is not high due to the characteristic of the cylindrical shape. Japan’s Panasonic and LG Energy Solutions are major manufacturers.

Among global automakers, German companies such as BMW and Benz use prismatic batteries, Hyundai Motor (005380)·Kia(Kia Motors (000270)), GM, Ford, etc. have used the pouch type. The cylinder is preferred by Tesla.

With the case of Volkswagen’s choice of prismatic batteries, the industry is expected to intensify the competition for technology development among battery manufacturers. Attempts are being made to compensate for the shortcomings of the prismatic, cylindrical, and pouch-type batteries, which are focused on by actual battery manufacturers, and to lower the cost.

Recently, CATL has developed’Cell-to-Pack Technology’, which increases the battery space utilization rate by about 20%. The battery consists of a module in which cells are gathered and a pack in which modules are gathered. Cell-to-Pack is a design technology that skips the module and connects directly from the cell to the pack. By eliminating modules and freeing up more space, you can increase energy density and reduce cost by reducing the number of parts, giving you an edge in the competition with pouch-type batteries.

Tesla announced that it will adopt a cylindrical battery as a future standard when introducing the next-generation ‘4680 battery’ at’Battery Day’ in September last year. The plan is to significantly improve performance such as mileage by increasing the size of the existing 2170 (diameter 21 mm, height 70 mm) small cylindrical battery. Korean battery makers, such as LG Energy Solution and SK Innovation, are also continuing technology development in the direction of increasing energy density and safety by increasing the nickel content of existing pouch-type batteries.

An official in the battery industry said, “At present, it is impossible to determine which battery will emerge as the flagship”. Reuters said, “As the electric vehicle market grows and the speed of change in related technologies is accelerating, there is a growing sense of crisis in the battery industry that our own batteries may be out of priority in one day.”