Korean battery makers hint at ‘price war’ with Chinese rivals
After years of a high-pricing, premium strategy, South Korea's top three battery makers -- LG Energy Solution, Samsung SDI and SK On -- are increasingly turning their eyes to low-priced batteries in an apparent move to prevent ceding more market share to their fast-growing Chinese rivals in the soaring global electric vehicle market.
SK On, a spinoff from SK Innovation, will unveil its first lithium iron phosphate (LFP) battery, at this week's InterBattery trade show that kicks off Wednesday in Seoul, making its official entry into the lower-end battery market dominated by a slew of Chinese players.
"After successfully applying high-nickel battery technology to LFP battery cells, we have 70 to 80 percent longer EV range compared to existing LFP batteries (mostly made by Chinese companies)," said an SK On official.
The official added the new product lineup will help diversify its corporate clientele as well as secure price competitiveness.
LG Energy Solution, the largest among the three, also plans to showcase LFP batteries for energy storage systems during the upcoming three-day exhibition.
Earlier, the company had said it would convert and set up existing production lines in China and the US for LFP-based ESS.
Because the Chinese plant in Nanjing already produces nickel, manganese and cobalt batteries — better known as NCM batteries — for Tesla, speculation is running high that some of the LFP batteries could be supplied to the US EV maker's Shanghai Gigafactory. Tesla uses LFP batteries made by CATL only.
"The long-length LFP battery cells in ESS can be put into EVs easily as they show better performance than standard-sized cells," an industry official said on condition of anonymity.
An LG official declined to comment on producing LFP batteries for EVs but offered a positive outlook for its market potential.
"Korean-made LFP batteries would have an upper hand in terms of product quality and accessibility to the US market," he said, citing the Inflation Reduction Act, which basically curbs tax benefits for EVs and parts made by China.
Samsung SDI, on the other hand, is focusing on developing high-manganese batteries without cobalt, one of the expensive battery materials along with nickel.
"High-manganese batteries have higher energy density than LFP batteries but are less costly and more stable than NCM batteries," said a Samsung official. One high-manganese battery cell's power is equivalent to that of almost two LFP battery cells combined, the official added, making production of high-manganese battery cells as cost efficient as the cheaper LFP ones.