The Korean battery makers failed to get battery certifications from China in June of last year and have since been repeatedly left out from government subsidies. The move that has been seen by industry watchers as retaliation against Korea’s deployment of a US anti-missile system pushed the operating rates of the three battery makers’ plants for electric vehicles in China to drop to as low as 20 percent last year.
“We originally built the plant in Nanjing targeting the Chinese EV market but we are now diversifying our businesses after having some trouble in the country,” an LG Chem official told The Korea Herald.
|LG Chem's EV battery|
The firm said they are shifting the assembly lines for electric vehicles into energy storage systems and also shipping both ESS and EV batteries to other Asian and European markets.
“Through the diversification, the operating rate in the Nanjing plant was raised up to 70 percent,” the official said.
Business at the Chinese plant turned around in the first quarter, posting 5.5 billion won ($4.9 million) in net income after posting 17.7 billion won in net losses last year.
LG Chem is also building an electric vehicle plant in Poland targeting German and other European automakers -- which are quickly shifting from gasoline engines to batteries -- with an investment of 400 billion won. The plant will be abe to produce the batteries in the second half of next year.
Samsung SDI is adopting similar strategies for its plant in Xian, the operating rate of which has reportedly been raised to 40 percent now.
Early this year, the battery maker joined the largest battery-based energy storage project in the US, led by US power giant AES Corp., supplying 240 megawatt-hour ESS batteries. Some of them were produced at the Xian plant.
“The operating rate in Xian will rise in the second half due to the rising demand for ESS alongside EV batteries for European market. It will be normalized in 2018,” said an executive at Samsung SDI on a conference call last week.
Samsung SDI is slated to produce batteries for German automaker Volkswagen e-Golf in the Xian plant later this year, accoridng to industry watchers.
The battery maker is also building a plant in Hungary, which will be capable of producing batteries for 50,000 electric vehicles. The plant will begin mass production in the second quarter of next year.
SK Innovation, the smallest battery producer of the three by sales, is also turning its eye on the European market.
“We are reviewing building EV battery plants in Hungary or the Czech Republic. The location will be determined this year and the battery cells will be produced in the second half of next year,” said Yoon Ye-sun, chief of SK Innovation’s Battery and Information/Electronics division, in May.
Early this year, the firm suspended its electric vehicle battery plant due to subsidy cuts and reduced orders in the nation. The Beijing BESK Technology plant was established in 2013 through a tripartite joint venture with two Chinese partners -- Beijing Electronics Holding and Beijing Automotive Industry Holding.
By Shin Ji-hye (firstname.lastname@example.org)