[News Today] China overtakes K-battery

[LEAD]
Chinese battery makers, led by CATL, are gaining momentum across the global EV battery market. Even outside of China, they have overtaken South Korea's top three battery firms in first quarter market share this year. We take a closer look at what's behind this decline, and whether there's a way forward.

[REPORT]
South Korean battery makers sought to gain an upper hand in the U.S. market through swift investment deals.

There are six plants already in operation in America with ten more under construction.

However such inroads have been held back under the Donald Trump administration which is known to shun eco friendly policies.

Donald Trump / U.S. President (Jan.)
We will end the green new deal and we will revoke the electric vehicle mandate saving our auto industry.

U.S. government subsidies may disappear alongside dim export prospects as U.S. carmakers such as General Motors are backing away from electric vehicles.

The situation is also challenging in Europe, a market that Korean firms have trailblazed.

This is because Chinese rivals whose exports to the U.S. are blocked have aggressively advanced to Europe flaunting their cost advantage.

While China's market share surged three fold in Europe over three years, the share of Korean made batteries nearly halved.

The overall battery market has been sluggish to begin with due to stagnant EV demand.

As such, the factory operation rate for the three major Korean battery firms all fell by half in this year's first quarter.

Earnings are also mostly in the red.

LG Energy Solution, the only firm to post a surplus, in fact also suffered a deficit if U.S. government subsidies are excluded.

Kim Dong-myung / President, LG Energy Solution (March)
This is a critical preparation period for us, with dwindling demand and various variables at play.

The companies have now shifted to survival mode by adjusting the pace of production and cost cutting measures.

Hwang Kyung-in / Korea Institute for Industrial Economics & Trade
More government support is necessary in tax breaks and R&D.

However there's still a long way to go in tariff talks with the U.S. while legislative discussions on providing support for these firms are at a standstill with the looming presidential election.

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