January 22, Beijing time. At present, Korean battery companies are constantly at a disadvantage in the competition with Chinese companies, and their share in the European market is also gradually declining. In this regard, an executive of South Korean battery giant SKOn said that Europe is facing the danger of over-reliance on Chinese batteries for electric vehicles.It is now difficult to agree on a coherent strategy within Europe to promote local battery production.
Going forward, European carmakers are expected to increase imports of affordable Chinese batteries.UBS analysts predict that Chinese battery companies' market share in the EU will rise from 30% to 50% between 2023 and 2027, while South Korean companies' share will fall from 60% to 40% during the same period. There are three major battery manufacturers in South Korea, and SKOn is one of them.
Min-suk Sung, chief commercial officer of SKOn, said in an interview: "In European governments, everyone I talk to is talking about de-risking. Different countries have different views and different approaches, but one thing they are consistent about is that you cannot leave it to chance."
UBS battery analyst Tim Bush pointed out the reasons why Korean companies are losing ground to Chinese rivals in Europe."The Europeans are pouring all their money into inexperienced local upstarts like Northvolt. At the same time, Korean battery companies are not expanding investment in European production capacity because U.S. subsidies make the country more attractive. This has led to a gap between supply and demand that, at least in the short term, may be filled by Chinese exports," Bush said.
SKOn ranks fifth in the global battery market
Currently, CATL and BYD are the world's top two battery manufacturers.Among non-Chinese companies, SKOn ranks third, behind LG New Energy and Japan's Panasonic. SKOn operates two gigafactories in Hungary and is building a third there. This will help European carmakers meet EU legislation passed last year that requires 90% of electric vehicle batteries in Europe to be produced locally by 2030.
However, Song Minshu said that SKOn is also in talks to supply batteries to Chinese electric car manufacturers seeking to expand in the European car market. He claimed that Chinese battery manufacturers were not as good at replicating manufacturing processes abroad as their South Korean rivals.
"The Chinese automakers I've spoken to all want to develop overseas," he said. "That's where we come in. As a battery manufacturer with an established presence in the target regions, we're willing to work with anyone."
Currently, SKOn has focused most of its overseas investments in the United States, where it has established joint ventures with automakers Ford and Hyundai. The company operates two battery plants in the United States and is building two more in the southern state of Kentucky, as well as one each in Tennessee and Georgia. Once all U.S. plants are completed, SKOn expects to have more than 180 gigawatt-hours of production capacity, enough to power approximately 2.5 million vehicles annually.
However,U.S. automakers last year paused expanding electric vehicle production capacity amid lower-than-expected U.S. consumer demand for electric cars and trucks, complicating SKOn's plans.Since then, Korean battery manufacturers including SKOn have suspended or scaled back investments in North America.