LGES, SK On mull entry into China's dominant cheap EV battery market
Tesla’s new batteries will use a lithium-iron-phosphate (LFP) chemistry than nickel-cobalt-aluminum (NCA), which is mainstay for Korean battery manufactures, usually for high-performance longer-range vehicles. China’s CATL and BYD are major producers of LFP batteries.
According to industry sources on Sunday, LG Energy Solution is due to announce its position regarding the development of LFP batteries during a third-quarter earnings conference call Monday afternoon.
Ji Dong-seop, CEO of SK On, or formerly SK Innovation, recently told Reuters that his company is mulling ways to develop LFP batteries with low cost and relatively high stability for short-range cars. Another battery major Samsung SDI does not plan any change to its manufacturing portfolio.
Korean EV battery makers are turning their eyes towards the development of LFP batteries as automakers around the world join to introduce low-cost LFP batteries for cheaper EVs.
The global LFP battery market has been growing rapidly in recent years. Market research firm Wood Mackenzie predicted that the portion of LFP in the global battery market will increase from 10 percent in 2015 to 30 percent in 2030.
LFP batteries are 20 to 30 percent cheaper than NCA or NCM batteries, which Korean companies are focusing on as LFP batteries use cheap iron instead of expensive cobalt.
Some experts say LFP batteries may be advantageous to the Korean industry in terms of business diversification given the current supply and power disruption suffered by nickel and aluminum metal smelters in China.
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