'K Battery' US Battle

[Asia Economy Reporter Park So-yeon] As the US-China trade conflict intensifies, competition among Korean companies is heating up over the US battery market, which is virtually closed off to Chinese companies. K-battery companies are focusing all their efforts on expanding production bases and marketing to US automakers to strengthen their dominance in the US market, where China’s battery industry leader CATL is struggling.

K-Battery Expands Territory in the US

According to the battery industry on the 26th, LG Chem and SK Innovation plan to secure production facilities capable of producing a total of 55 gigawatt-hours (GWh) of electric vehicle batteries in the US by 2023. This production capacity can supply batteries for approximately 900,000 electric vehicles annually.

LG Chem plans to secure a production facility with an annual capacity of 30 GWh in Rose Town, Ohio, in partnership with GM by 2023. Accordingly, the GM electric vehicle battery volume from the Michigan electric vehicle battery plant, completed in 2013, will be transferred to Rose Town.

The Michigan plant, with an annual capacity of 5 GWh, will handle electric vehicle battery volumes for other customers such as Volvo and Chrysler. Although the possibility has decreased due to the joint venture with GM, LG Chem still keeps open the possibility of building a plant in the US southern Sun Belt region, such as Kentucky or Tennessee, where many automakers’ plants are concentrated.

SK Innovation plans to complete its first electric vehicle battery plant with a capacity of 10 GWh in Georgia by 2021 and use it to supply Volkswagen’s US plant. Following that, it will complete a second plant of the same scale in Georgia by 2022, which will serve as a supply line for Ford’s electric vehicle batteries in the US.

Fierce LG vs. SK Battery War... Expands into US 'GM vs. Ford' Competition

LG Chem and SK Innovation have secured GM and Ford, the top two automakers in the US market, as customers, igniting competition among these automakers in the electric vehicle sector. From 2023, all 20 of GM’s electric vehicle lines will be equipped with LG Chem’s electric vehicle batteries.

While LG Chem maintains a close relationship with GM, SK Innovation has partnered with Ford. In particular, SK Innovation produces battery volumes for Ford’s 'F' series electric trucks, which have held the top spot in the US pickup truck market for about 40 years, while LG Chem handles GM’s 'Hummer' series electric trucks. This has led to expectations that the battery technology competition between the two companies will reach its peak across the vast US continent.

K-Battery 'Wings' in the US Without CATL... Challenges Are Battery Lawsuits

Currently, only a handful of companies can reliably supply electric vehicle batteries in the global battery market. These include China’s CATL and BYD, Korea’s LG Chem, SK Innovation, Samsung SDI, and Japan’s Panasonic. Among them, Chinese companies, despite having sufficient investment capacity, face difficulties securing US production bases due to US government restrictions.

Japan’s Panasonic focuses solely on producing cylindrical batteries for Tesla electric vehicles, making it practically difficult to supply other automakers. This is why there is a growing expectation that Korean electric vehicle battery companies, which have rapidly entered the US domestic market, are about to reap the benefits.

An industry insider said, "Even if CATL has plenty of money, the US is a region where it cannot invest," adding, "Our companies’ strategy is to properly secure the US, which is practically a China-free zone."

However, the ongoing trade secret infringement lawsuit between LG Chem and SK Innovation at the US International Trade Commission (ITC) poses a variable. If SK ultimately loses this lawsuit, the export of its battery component materials to the US will, in principle, be prohibited, and it may become difficult to operate the battery plant under construction in Georgia.

Some in the industry predict that even if the ITC ruling is issued, President Donald Trump could exercise a veto to protect jobs in Georgia and the US electric vehicle industry.

This content was produced with the assistance of AI translation services.