Korean firms seek to lead market for car batteries
- Source: Global Times
- [15:35 August 31 2009]
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Korea's large businesses are vying to grab a bigger share of the battery market for electric and hybrid cars, which is expected to grow exponentially. Three big firms - a chemicals firm, a display maker and a refinery business - are expanding their lithium-ion battery businesses, seeking to create new income sources to offset the slow growth of their traditional businesses.
A lithium-ion battery is a type of rechargeable battery currently used in portable electronics such as laptops, but they are increasingly being used to power electric or hybrid cars.
Most electric and hybrid vehicles currently in use are powered by nickel-metal hydride batteries, but these traditional batteries are losing ground to lithium-ion batteries, which are more compact, more powerful and allow longer driving distances.
LG Chem, Korea's biggest chemical firm, is leading the car battery market, winning a slew of deals with leading automakers such as General Motors and Hyundai Motors to supply its products.
On Friday, LG Chem said it is considering creating a joint venture to produce electric vehicle batteries with Hyundai Mobis, Korea's biggest auto parts maker affiliated with Hyundai Motor. The envisioned joint venture looks to supply batteries with Hyundai Motor and its affiliate Kia Motors as well as other car makers overseas.
LG Chem has been also picked as the supplier to provide lithium-ion batteries for General Motors' upcoming electric cars - Chevrolet Volt and Buick.
LG's products also power Hyundai Motor's LPI Hybrid Avante and Kia Motors' LPG hybrid Forte, which were launched in July.
LG Chem, a unit of LG Group, aims at achieving 2 trillion won in revenue from its battery business and grabbing more than 20 percent of the global electric vehicle battery market by 2015. LG Chem in June said it would invest 1 trillion won in building an electric vehicle battery plant.
Samsung SDI, a unit of Samsung Electronics, has been also stepping up its battery business as the company is shifting its focus from its traditional display business to batteries.
Samsung SDI last year created an electric vehicle battery joint venture with Germany's Robert Bosch, which last week agreed to build a battery plant for electric and hybrid cars in the southeastern city of Ulsan. Its production will start in 2012.
In early August, the companies said the plant would supply batteries for BMW's electric cars for eight years starting from 2013.
Samsung SDI expects the lithium-ion battery market for electric cars to grow to $15.9 billion in 2020, from the current $180 million. It targets a 30 percent market share by 2015.
Samsung SDI is the world's No. 2 maker of lithium-ion batteries after Japan's Sanyo, holding a 17 percent share at the end of 2008, according to Japanese market research firm IIT. Sanyo held 27 percent of the market.
SK Energy, the country's top refiner, is also moving to mass-produce electric car batteries and find buyers of its products. It aims to derive 2 trillion won in revenue from the battery business in 2015.
(Korea Herald)
