LG ChemㆍSamsung SDI on board of Volkswagen…Chinese battery barrier to overcome
Park Jung Il | comja77@ | 2018-03-16 10:22:40
LG Chem and Samsung SDI, which had been struggling with the payment of the difference in electric vehicle subsidies in China, had a chance to win the Volkswagen battery. However, how to overcome pressure from price cuts by carmakers and make profits is a matter of homework.
Volkswagen has signed EUR 20 billion (about KRW 26 trillion) battery supply deal with LG Chem, Samsung SDI, and China CATL for the mass production of electric vehicles on March 13, according to industry sources. He added that North American battery suppliers will be selected in the near future.
Volkswagen has set up at least 16 new electric vehicle production facilities by 2025 and has set a goal of increasing its annual electric vehicle sales to 3 million units. By region, five, four, and one each will be deployed in China, Europe, and the United States, with the goal of starting operations in 2020.
According to the plan, Volkswagen will overtake Tesla, the leading electric car fan, and leap to become the leading electric car company. Tesla last year sold 102,270 electric cars.
The industry expects LG Chem and Samsung SDI to take the lead in the electric car battery market with this order. Considering that global electric vehicles (including plug-in hybrid cars) sold at about 1.1 million units last year, and the domestic market, which domestic battery makers are currently unable to deliver, is about 470,000 units, it is enough to make up for the slump in China. LG Chem has started mass production of electric cars in Poland in the first quarter of this year, and Samsung SDI plans to mass-produce it in the second quarter after completion of the plant in Hungary.
The securities industry also believes that this order will have a positive impact on the domestic battery industry such as LG Chem and Samsung SDI. "If we include the US market, Volkswagen`s battery supply contracts for electric vehicles are estimated to be between USD 40 billion and USD 50 billion," said Han Byung-hwa, a researcher at Eugene Investment & Securities. "Volkswagen`s sales of electric cars last year were 43,000 and that is the expectation for growth in the future. "
In fact, Park Jin-soo, vice chairman of LG Chemical, announced that it will raise sales of the battery business including electric car battery to about 10 trillion won by increasing orders from the US and Europe. Considering that sales of battery business headquarters last year amounted to KRW 4,560.6 billion, will increase sales more than double in three years.
However, there are concerns that Volkswagen is under pressure to lower battery prices, as large-scale orders are in the lead in the industry. In fact, SK Innovation has not participated in the Volkswagen order taking into consideration profitability.
"There is a rumor that Volkswagen has requested that the battery supply price be lowered to less than USD 100 per 1kwh lower than General Motors," said a battery industry official. And we will try to secure profitability by lowering the cost by developing production and manufacturing technology for the rest of the year.？
By Park Jung Il comja77@
[ copyright ⓒ The Digitaltimes ]
Volkswagen has signed EUR 20 billion (about KRW 26 trillion) battery supply deal with LG Chem, Samsung SDI, and China CATL for the mass production of electric vehicles on March 13, according to industry sources. He added that North American battery suppliers will be selected in the near future.
Volkswagen has set up at least 16 new electric vehicle production facilities by 2025 and has set a goal of increasing its annual electric vehicle sales to 3 million units. By region, five, four, and one each will be deployed in China, Europe, and the United States, with the goal of starting operations in 2020.
According to the plan, Volkswagen will overtake Tesla, the leading electric car fan, and leap to become the leading electric car company. Tesla last year sold 102,270 electric cars.
The industry expects LG Chem and Samsung SDI to take the lead in the electric car battery market with this order. Considering that global electric vehicles (including plug-in hybrid cars) sold at about 1.1 million units last year, and the domestic market, which domestic battery makers are currently unable to deliver, is about 470,000 units, it is enough to make up for the slump in China. LG Chem has started mass production of electric cars in Poland in the first quarter of this year, and Samsung SDI plans to mass-produce it in the second quarter after completion of the plant in Hungary.
The securities industry also believes that this order will have a positive impact on the domestic battery industry such as LG Chem and Samsung SDI. "If we include the US market, Volkswagen`s battery supply contracts for electric vehicles are estimated to be between USD 40 billion and USD 50 billion," said Han Byung-hwa, a researcher at Eugene Investment & Securities. "Volkswagen`s sales of electric cars last year were 43,000 and that is the expectation for growth in the future. "
In fact, Park Jin-soo, vice chairman of LG Chemical, announced that it will raise sales of the battery business including electric car battery to about 10 trillion won by increasing orders from the US and Europe. Considering that sales of battery business headquarters last year amounted to KRW 4,560.6 billion, will increase sales more than double in three years.
However, there are concerns that Volkswagen is under pressure to lower battery prices, as large-scale orders are in the lead in the industry. In fact, SK Innovation has not participated in the Volkswagen order taking into consideration profitability.
"There is a rumor that Volkswagen has requested that the battery supply price be lowered to less than USD 100 per 1kwh lower than General Motors," said a battery industry official. And we will try to secure profitability by lowering the cost by developing production and manufacturing technology for the rest of the year.？
By Park Jung Il comja77@