Go to Contents Go to Navigation

(LEAD) Telsa's Battery Day draws mixed reactions in S. Korea

Industry 16:18 September 23, 2020

(ATTN: UPDATES with LG Chem's projection of output capacity in 8th para; stock price in last two paras)
By Kim Kwang-tae

SEOUL, Sept. 23 (Yonhap) -- South Korean manufacturers of electric vehicle (EV) batteries on Wednesday showed mixed reactions to Telsa's ambitious road map to cut the cost of EV batteries in half.

Tesla said its new cylindrical cells would reduce the cost per kilowatt hour by 56 percent and extend its electric vehicle range by 54 percent in coming years.

The U.S. electric carmaker is also pushing to produce 100 gigawatt-hours (GWh) of its own battery cells in 2022 before ramping up its annual capacity to 3 terawatt-hours -- 3,000 GWh -- by 2030.

This composite image shows logos of South Korean electric vehicle battery makers. (Yonhap)

Tesla CEO Elon Musk tweeted Tuesday that he foresees significant shortages of battery cells in 2022 and beyond unless Tesla boosts output of its own cells.

Musk said that Tesla intends to "increase, not reduce battery cell purchases" from EV battery suppliers -- Japan's Panasonic, South Korea's LG Chem and China's CATL.

Tesla's proposed hike in battery production could pose a challenge to LG Chem and two other South Korean EV battery makers.

"Tesla would reduce its reliance on battery suppliers, which in turn would make them competitors from demand-supply relations," an official of the South Korean EV battery industry said.

LG Chem, the world's largest supplier of EV batteries, is on track to boost its production capacity to 100 GWh by the end of this year before ramping up its capacity to more than 200 GWh by 2023, which is enough to supply batteries for about 3.4 million electric cars.

SK Innovation Co., another South Korean EV battery maker, has said it aims to boost its production capacity to 100 GWh by 2025.

Kim Kwang-jin, a researcher at Yuanta Securities Korea Co., said Tesla's proposed hike in battery output could be a symbolic figure, as it is nearly impossible to put in place massive manufacturing facilities of battery cells in a short period of time.

Musk has missed some of his own deadlines after making ambitious goals.

Hwang Sung-hyun, a researcher at Eugene Investment & Securities, said Tesla did not unveil technology innovations that could threaten South Korean manufacturers of EV batteries on its Battery Day.

Hwang said Tesla's Battery Day is meaningful in that it displayed Tesla's long-term vision, but it eased uncertainty on South Korean EV battery makers in the short term.

Shares in LG Chem fell 1.41 percent to 630,000 won (US$540), underperforming the broader KOSPI's 0.03 percent gain.

Shares in Samsung SDI shed 2.24 percent to 436,500 won, and SK Innovation Co. saw its shares fall 1.99 percent to 148,000 won.

entropy@yna.co.kr
(END)

Keywords
HOME TOP
Send Feedback
How can we improve?
Thanks for your feedback!