[Bojo, Battery] Korean Batteries Losing Mid-Low Price Market to China... LFP Commercialization Only by 2026

Korea Loses Majority Market Share Outside China
Mainly Due to Losing Mid-to-Low Price Market Including LFP

The global market share of Korean battery companies is significantly shaken. Analysts say that giving up the mid-to-low price market to China while sticking only to a premium strategy is coming back as a boomerang.

According to market research firm SNE Research on the 9th, the combined market share of domestic battery companies such as LG Energy Solution, SK On, and Samsung SDI recorded 45.6%, down 2.7 percentage points (p) from the same period last year. Korea's No. 1 LG Energy Solution grew 6.2% (75.1GWh) year-on-year and maintained second place overall with a 25.9% market share. SK On, ranked third, recorded a growth rate of 10.2% (31.0GWh) and achieved a 10.7% market share. Samsung SDI grew 2.5% (26.2GWh) and showed a 9.0% market share.

In the global battery market excluding China, the three Korean battery companies had a market share exceeding 50% just three years ago. ▲2021: 55.8% ▲2022: 53% ▲2023: 48.7%. Over the past three years, the market share has been declining, and last year, they finally lost the majority share. This year, it is highly likely that the figure will retreat even further.

Their position in the global market including China has become even narrower. From January to October this year, the combined market share of the three battery companies in global electric vehicle battery usage fell 3.5 percentage points from the same period last year to 20.2%. The combined market share of the three battery companies dropped from 31.7% in January-October 2021 to 20.2% in three years. Now, there is concern about a fall to the 10% range. During the same period, the combined market share of China's CATL and BYD rose from 39.7% to 53.6%, taking market share from domestic companies.

The reason for giving up a large market share to Chinese battery companies is analyzed to be the lack of alternatives in the mid-to-low price lineup. Compared to the ternary batteries where domestic battery companies show manufacturing competitiveness, LFP (Lithium Iron Phosphate) batteries, which are about 30% cheaper, have recently expanded their share significantly in the battery industry. The proportion of LFP batteries installed in passenger electric vehicles rose sharply from 27.5% in 2021 to 46.4% last year. This is because of the chasm?temporary demand stagnation in growth industries combined with prolonged high interest rates and inflation?leading electric vehicle buyers with reduced purchasing power to choose cheaper LFP batteries. Korean battery companies had no suitable mid-to-low price product alternatives.

Although the three Korean battery companies are accelerating the development and commercialization of LFP batteries, they are considered to be late. So far, the three battery companies have focused on high-energy-density ternary batteries installed in high-performance electric vehicles. LG Energy Solution plans to supply 590,000 pouch-type LFP batteries for the Renault Ampere starting from the end of 2025. The Ampere compact electric vehicle equipped with LFP batteries will be released in 2026. SK On is expected to be capable of mass-producing electric vehicle LFP batteries as early as 2026. Samsung SDI plans to produce LFP batteries for energy storage systems (ESS) in 2026.

The LFP market is also actively produced by Chinese companies based on a solid supply chain, so it is uncertain whether the late entry of domestic companies will be effective. The Korea Institute for International Economic Policy emphasized in its report "Analysis and Implications of China's LFP Battery Supply Chain" that "competition with Chinese companies, which have price competitiveness through vertical integration of the supply chain, will not be easy for our companies that have just started the LFP battery business," and "especially, we must prepare for resource acquisition competition with Chinese companies during the LFP supply chain construction process."

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