Korea to produce LFP batteries in 2026 to challenge China's dominance

Domestic battery makers are all pursuing cheaper lithium iron phosphate batteries with a production goal of 2026 in bid to chip away at the market strength of China's CATL and BYD.

From left, Park Tae-sung, vice chairman of the Korea Battery Industry Association, Yu Jeoung-yeol, CEO of Korea Trade-Investment Promotion Agency, Jeff Robinson, Australian ambassador to Korea, Koo Dong-hwi, CEO of LS MnM, Joo Jae-hwan, CEO of EcoPro BM, Lee Seok-hee, CEO of SK On, Kim Dong-myung, CEO of LG Energy Solution, Kang Kyung-sung, Vice Trade Minister, Choi Yoon-ho, CEO of Samsung SDI, Kim Jun-hyung, head of eco-friendly materials business at Posco Holdings, Jung Moo-kyung, president at Korea Zinc, Philip Goldberg, U.S. ambassador to Korea, Peter van der Vliet, Dutch Ambassador to Korea, Lee In-ho, vice chairman of Korea International Trade Association, Lee Dong-ki, president of Coex, attend the ribbon-cutting ceremony of InterBattery 2024 held in Coex, southern Seoul on Wednesday. [JOINT PRESS CORPS]

Korean battery makers will produce cheaper lithium iron phosphate (LFP) batteries no later than 2026, their CEOs say, to challenge the dominance of a few Chinese names like CATL and BYD.

“We’ve already completed the development of LFP batteries, and are set to start mass production in 2026 after detailed discussions with clients,” SK On CEO Lee Seok-hee said during an interview on the sidelines of InterBattery 2024 held in Coex, southern Seoul, on Wednesday.

“The LFP battery market will grow, and Korean-made batteries will have competitiveness over the Chinese companies.”

SK On CEO Lee Seok-hee speaks during an interview at InterBattery 2024 held in Coex, southern Seoul on Wednesday. [JOINT PRESS CORPS]

LFP batteries are around 40 percent cheaper than nickel cobalt manganese (NCM) batteries, for which Korean makers hold a firmer standing. Around 90 percent of the world's LFP batteries are made by Chinese companies, with CATL and BYD racing for the top two spots.

SK also unveiled a Winter Pro LFP battery at the battery show at Coex, which improves the energy density of the battery by 19 percent in the winter. The density of LFP batteries is usually cut by up to 70 percent in cold weather.

Samsung SDI CEO Choi Yoon-ho also said he eyes 2026 for the start of its LFP battery production.

Kim Jun-hyung, second from left, head of the eco-friendly materials business at Posco Holdings, tours the company's booth at InterBattery 2024 held in Coex, southern Seoul on Wednesday. [JOINT PRESS CORPS]

Posco Holdings is considering building a joint LFP cathode plant with a Chinese company to make a quicker jump into the fast-growing market.

“We have had good relationships with a few Chinese companies, and they are the candidates,” said Kim Jun-hyung, head of the eco-friendly materials business at Posco Holdings, during an interview on Wednesday.

Kim served as CEO of Posco Future M, a cathode producer, until recently.

“The stake of their share of the joint plant will be restricted to 25 percent to comply with the Inflation Reduction Act.”

LS MnM CEO Koo Dong-hwi speaks during an interview at InterBattery 2024 held in Coex, southern Seoul on Wednesday. [JOINT PRESS CORPS]

Cathode is one of four key components in making batteries that account for more than 40 percent of the unit cost.

LS MnM CEO Koo Dong-hwi pledged to focus on the battery material business, with a hopeful initial public offering.

“The battery materials business will go public,” Koo said during an interview. “But we will never hurry.”

LS jumped into the battery business last year with the announcement of a 670 billion-won ($502 million) investment in Ulsan and 1.2 trillion won in Saemangeum, North Jeolla.

“We are a latecomer to the market, but it could be a chance for us.”

BY SARAH CHEA [chea.sarah@joongang.co.kr]