China and South Korea are competing for new energy vehicles. Should we be wary of South Korea’s Samsung and LG battery industry being cut off?

The South Korean government is actively promoting the new energy vehicle battery industry, and Samsung and LG are also rapidly expanding in the new energy battery field. With the superposition of these two forces, South Korea may become China's biggest rival in the new energy battery field.

On October 27, Lee Chang-yang, director of South Korea’s Ministry of Trade, Industry and Energy (Ministry of Industry), stated at an emergency economic and people’s livelihood meeting that he planned to vigorously promote the development of the new energy vehicle battery industry and build the secondary battery industry into the second semiconductor industry.

The fundamental reason why the Korean government is making great efforts to promote the development of new energy batteries is that currently, global car giants are vying to purchase Korean-made power batteries , and the Korean government has also promoted the development of the battery industry by establishing a battery alliance and other actions.

South Korea is seizing the spotlight of new energy vehicles from a national perspective, and their goals and ambitions are no longer hidden.

Perhaps South Korean new energy vehicles cannot compete with China, but South Korean companies led by Samsung and LG are betting on the new energy vehicle battery industry, trying to jointly occupy the global commanding heights.

South Korea’s capabilities in the field of electric vehicle batteries cannot be underestimated. Relevant data shows that in September this year, South Korea's LG new energy battery installed capacity was 8.8 GWh, ranking second in the world after CATL .

There are currently three main battery manufacturers in South Korea. In addition to LG, Samsung SDI and SK On are also not weak. The three companies account for more than a quarter of the global electric vehicle battery market and are battery suppliers to Tesla , Volkswagen, General Motors and other automobile companies.

Why do Chinese companies need to be wary of the Korean battery industry?

1. Korean companies account for 25% of the global new energy vehicle battery market, and they want to expand.

New energy vehicles look at the battery. Against the background that Chinese and Korean companies "monopolize" the global mainstream power battery production share, Korean companies are the biggest rivals in the globalization of China's new energy industry, both in terms of industry structure and market performance.

Considering that South Korea continues to release greater ambitions for the new energy vehicle battery industry, this has brought some hidden worries to the global expansion of China's new energy vehicles.

According to relevant industry statistics, South Korea's LG new energy battery installed capacity ranks second in the world after CATL. At present, three South Korean companies, LG, Samsung and SK, have occupied more than 25% of the global new energy vehicle battery market, and their overall share is second only to Chinese companies.

Although from the perspective of industry layout, there are some gaps between South Korea's new energy vehicle industry chain and China's, it is not easy to survive. Batteries will be the growth pole they focus on building with national efforts.

2. China’s new energy vehicles are growing rapidly, and South Korea hopes to seize the opportunity.

In recent years, Chinese new energy vehicle brands represented by BYD , NIO, Xpeng, Geely, etc. have taken the first step to set up factories overseas.

From market, policy, technology to division of labor and cooperation in the industrial chain, China's new energy vehicle industry has obvious advantages, which is also a basic factor for the continuous expansion of China's new energy vehicle industry's global influence.

Although there is a shortage of lithium resources, China has a large number of enterprises in every key manufacturing link such as positive electrodes, negative electrodes, electrolytes, separators, etc., so the industrial chain is relatively complete. It has significant cost advantages in core batteries, motors and other components of new energy vehicles.

Strong domestic demand is the confidence for China's new energy vehicles to go global. As China's new energy vehicle consumer market is huge and growing rapidly, this will help car companies and upstream and downstream manufacturers quickly iterate technology and user experience, thereby promoting the continuous improvement of the new energy vehicle industry chain.

In the new energy vehicle industry where "whoever gets the battery wins the world", Chinese battery companies dominate the world. With the efforts of the "group" of Chinese companies such as CATL, Everview Lithium Energy , Sunwoda , and Desai Battery, China's consumption In the lithium battery field, it has been the global leader for many years and has more say in the technology of lithium battery.

Naturally, South Korea did not want to lose this opportunity and chose to use batteries as an entry point. Their goal is self-evident.

3. Europe is a battleground between China and South Korea, and South Korean companies are increasing investment in Europe.

In the era of fuel vehicles, European cars have obvious advantages in terms of technology, brand and standard output. But in the era of new energy vehicles, its advantages are not obvious. Compared with China's new energy vehicles, it is even weaker than China in some industrial chain links. Currently, global new energy vehicle brands are vying to enter the European market, and Chinese new energy vehicles are no exception.

BYD, NIO, Xpeng, Geely, etc. are pioneers in the globalization of China's Xinyuan vehicles. They have successively set up branches or 4S stores in Europe and begun to accelerate the layout of new energy vehicles. Not only for Europe, the growth rate of China's new energy vehicle globalization is obvious.

Data show that in the past 2021, China's new energy vehicle exports increased by as much as 442% year-on-year. The proportion of new energy vehicle exports in complete vehicle exports increased from 7% to 15%. China's pure electric vehicle sales accounted for 59% of the world's total. %, China has become the world's largest new energy vehicle market for seven consecutive years.

It is worth noting that as the global new energy vehicle market enters a relatively stable period, China's new energy vehicles have begun to focus on the markets of developed countries, which shows that the depth and breadth of the globalization of China's new energy vehicles continue to decline.

Outside of the consumer market, competition in the battery field is even more intense. Also in the European market, according to foreign media reports, Korean battery companies have continued to expand their investment layout in Europe in recent years, hoping to compete with Chinese companies in market share.

LG New Energy plans to invest approximately 40 billion yuan in Poland's automotive battery factory from 2016 to 2025, and plans to have a battery production capacity of 260GWh by 2023; starting in 2019, Samsung SDI has continued to invest in adding battery unit production lines in Hungary ; South Korea's SK plans to invest in building a battery factory in Hungary.

In August this year, LG New Energy completed the renewal of its contract with electric bus manufacturer Proterra, which was interpreted as "accelerating the pace of adding factories in the United States." At the same time, the joint venture between SK and Ford plans to establish two battery factories in North America. It is expected to achieve mass production in 2025, with a planned annual production capacity of 60GWh; Samsung SDI will expand its layout in the US market and may build a battery factory in central Illinois...

Compared with the frequent actions of competitors, some shortcomings of Chinese new energy vehicle companies will inevitably be exposed.

For example, at the core battery level, except for CATL and BYD, there are not many Chinese battery companies that can compete with foreign battery companies. Especially compared to the "Big Three" that South Korea is eyeing and following closely behind, we still have room to make progress.

More importantly, it is often easier for the United States, Europe, Japan, and South Korea to form a community of interests. Therefore, in the current special international environment, we must be especially wary of new energy companies represented by Korean companies joining other forces to form an encirclement and suppression trend against us. .

4. In the race against South Korea, Chinese new energy battery companies have a long way to go.

As a new energy force that closely follows Chinese companies, Korean companies are undoubtedly the biggest competitors in the globalization of China's new energy vehicles.

Since there are more or less gaps between China and traditional powers such as the United States, Japan, and Europe in the new energy industry chain, market, and core components, if China's new energy vehicles want to have more say in the world, they need to Attach great importance to the layout of Korean companies.

Korean companies can quickly use batteries, services, etc. as entrances globally, and provide services to other new energy vehicle companies by setting up power stations and electric piles. This will help them seize a favorable position and form valuable integration. Therefore, Korean companies will find ways to compete with China on this track.

As the core component of new energy vehicles, power batteries represent the "soul" of the value of new energy vehicles. A country's power battery market and technical level represent the country's industry voice.

Today, although China is firmly at the top of the global power battery market, as Korean companies such as LG New Energy and Samsung continue to increase their market share, Chinese companies are also facing a decline in their power battery market share.

Chinese new energy vehicle battery companies need to be particularly vigilant about the layout of Korean companies such as LG, Samsung, and SK. This determines that Korean companies will be China's main rivals in the globalization of new energy batteries for a long time to come.