LG, Samsung, SK urged to secure battery raw materials and talents
LG Chem, Samsung SDI and SK Innovation must find ways of securing a stable supply of raw materials for battery production to maintain their competitive power in the European electronic vehicle (EV) battery market, the Korea International Trade Association (KITA) said.
According to a report by the trade organization’s Brussels branch, the battery makers also need to strive to cultivate talented personnel.
The report said sales of EVs in the European market grew 33 percent to 408,000 last year from a year earlier, with the sales volume expected to surpass 4 million in 2025.
The scale of the EV battery market is also expected to grow to 250 billion euros in that year.
Currently, the global EV battery market is led by companies in Korea, China and Japan, with European companies taking only about a 4 percent market share.
But European carmakers such as Audi and Volvo are planning to invest 145 billion euros in battery production over the next 10 years.
The European Commission also launched the European Battery Alliance in October 2017, actively supporting battery production for clean energy transition and the competitiveness of the automotive sector.
The report said LG Chem, SK Innovation and Samsung SDI, which have made a series of investments, have occupied an important position in the supply chain of the European EV battery market.
But they will inevitably face fierce competition in Europe in 2025 when European companies are expected to complete their investments and begin to produce batteries on their own.
“Korean companies are strong in the battery sector, but are inadequate to secure raw materials that account for a huge portion of battery production costs,” the report said. “Companies need to mull ways of stably securing raw materials and make efforts to develop next-generation batteries, nurture relevant personnel and establish relevant infrastructure.”
KITA called on Korean companies to actively consider signing free trade agreements with countries that possess key raw materials such as lithium and cobalt to stably secure them.
The European Union signed a trade deal recently with Mercosur after 20 years of negotiations. Mercosur is an economic bloc comprising Argentina, Brazil, Paraguay, Uruguay and Venezuela, known to have abundant natural resources.
Meanwhile, LG Chem aims to achieve a total 70-gigawatt-hour battery pack capacity in Europe as it is planning to build its second plant in Poland. SK Innovation is moving to build its second plant in addition to the existing one in Hungary.
Samsung SDI is also planning to build additional plants in Hungary.