SEOUL, Aug. 2 (Korea Bizwire) — Korean battery firms are boosting investment in key materials to secure a stable electric vehicle (EV) battery supply chain and lower manufacturing costs in the face of intensifying global competition.
Three Korean battery makers — LG Energy Solution Ltd., Samsung SDI Co. and SK Innovation Co. — have announced new investment plans to expand their capacity to produce key materials and are pushing to forge partnerships with other industry players at home and abroad.
To meet growing demand for EV batteries, the companies are exploring ways to up the in-house production of core components, such as cathodes, anodes, electrolytes and separators, while teaming up with mining and metal companies to secure essential materials, including nickel, cobalt and manganese.
LG Chem Ltd., the parent of battery maker LG Energy Solution Ltd., said last week it will take over LG Electronics Inc.’s battery separator business for 525 billion won (US$458.5 million) to further expand its battery portfolio.
Battery separators are one of the key components of lithium-ion batteries used in electric vehicles, which are important in preventing batteries from exploding in the charging process.
The latest acquisition is part of the chemical firm’s plan to invest 6 trillion won by 2025 to establish a wide battery supply chain.
In December, LG Chem plans to break ground for a separator factory with an annual production capacity of 60,000 tons in the southeastern city of Gumi.
LG Chem said it is also preparing a joint venture with mining companies to secure stable supplies of key metals used in battery production.
SK Group, the nation’s No. 3 conglomerate, has been ramping up investment in battery material business to spur its green transition and create synergy between its affiliates.
SK Innovation has agreed to form a joint venture with Chinese battery maker EVE Energy and Chinese battery material producer BTR to build a cathode manufacturing factory in China.
In May, its battery material subsidiary SK IE Technology Co. (SKIET) debuted in the Seoul bourse as it was seeking to draw funds for expanding battery separator production capacity.
SKIET supplies battery separators to major EV makers, including Tesla and Volkswagen, taking up 26.5 percent of the global wet separator market, according to SNE Research.
SKIET said it will use the proceeds from the IPO to expand production as the wet separator market is expected to face a supply crunch beginning in 2023 in line with growing EV demand.
Last month, SK Materials Co., a semiconductor and display material subsidiary, said it plans to invest 60 billion won in the joint venture with Group 14 Technologies, a U.S.-based provider of lithium-silicon battery material designed to enhance the energy density of batteries.
Samsung SDI is also working on partnerships with materials manufacturers to raise its in-house production of cathodes up to 50 percent by 2023.
Last year, the company formed a joint venture with Korean cathode producer EcoPro BM, and has been building a cathode factory in the southeastern city of Pohang to start mass production next year.
Samsung SDI said last week it will invest 150 billion won in its wholly owned subsidiary SMT Co., to expand its cathode production capacity.
During last week’s earnings call, company officials vowed to ramp up efforts to secure key battery materials, including cathode, anode and separators, via joint ventures and other strategic partnerships with mining and other companies.
Market watchers say the race is on to establish the sustainable battery supply chain to enhance the performance of EV batteries and drive down the overall manufacturing costs.
“As the EV market is rapidly growing, battery makers are scrambling to enhance performances of lithium-ion batteries,” Kim Jong-min, an analyst at Samsung Securities, said.
“Investors are paying keen attention to battery material companies with advanced technologies, which are expected to benefit from the surging demand.”