[The Opening Act of the 4680 Battery War] Domestic Top 3 Companies Also Eyeing... Additional Investments Expected

Korea, China, Japan Compete Fiercely for Medium and Large Cylindrical Battery Orders
Panasonic Secures $4 Billion US Production Plant
LG Energy Solution Plans Mass Production Starting November 2023
CATL Establishes Cylindrical Battery Mass Production System

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Investment in medium-to-large cylindrical batteries is accelerating. As Tesla is expected to fully adopt the '4680 cell battery' starting this year, the strategy is to gain an advantage in the supply competition. With South Korea and China competing for global electric vehicle battery market share, and Japanese companies joining in, the competition among the three countries?Korea, China, and Japan?is heating up. 'The Dawn of the 4680 Battery War'

According to the industry on the 19th, companies that have confirmed battery production investments for Tesla or are expected to invest in the future include LG Energy Solution, Samsung SDI, China's CATL and BYD, and Japan's Panasonic.

Panasonic, which has maintained a long-term cylindrical battery supply relationship with Tesla, reportedly delivered 4680 cell batteries produced in Japan to Tesla in May. Following the previously supplied 2170 batteries, the 'Tesla-Panasonic' symbiotic system is expected to continue.

Furthermore, Panasonic Energy plans to invest $4 billion, approximately 5.23 trillion KRW, to establish a 4680 cell battery factory in Kansas, USA. For this factory, targeted to start operations in 2024, the state of Kansas has prepared investment attraction benefits worth about 1.6 trillion KRW, including a 15% refund of the total investment amount.

Additionally, Panasonic plans to invest 80 billion yen, about 76 billion KRW, in Japan starting next year to build two production lines and mass-produce 4680 cells.

LG Energy Solution is also expected to begin supplying Tesla starting next year. LG Energy Solution plans to invest in new 4680 cell battery facilities at its Ochang Plant 2. They intend to invest 580 billion KRW by October next year to secure a 9GWh mass production capacity. This is expected to start production in November next year, ahead of Panasonic's U.S. factory, which plans 10GWh production by March 2024.

CATL, a Chinese electric vehicle battery manufacturer that has only produced prismatic batteries until now, signed a supply contract with BMW Group in the first half of the year to supply cylindrical batteries for the new electric vehicle platform 'Neue Klasse' launching in 2025. With CATL establishing a cylindrical battery mass production system, it is expected to enter the 4680 cell battery competition.

In particular, CATL unveiled the 'Kirin Battery' last month, which can travel 1000 km on a single charge. They claim it can store 13% more electricity than the 4680 cell battery, showcasing their technology to expand overseas markets. The Kirin Battery maximizes space efficiency by omitting the module structure of conventional batteries. It consists only of cells and packs, called the 'cell-to-pack' method.

BYD, which has become the world's top electric vehicle seller backed by the rapidly expanding Chinese market, is also strongly expected to supply batteries it produces itself to Tesla. However, it is presumed to be the Blade Battery rather than the 4680 cell, and there are reports that testing is underway to supply batteries to Tesla's Model Y starting February next year.

Samsung SDI is expected to supply medium-to-large cylindrical batteries to BMW rather than Tesla. In the second quarter, it prepared a pilot line for 46 form factor (cylindrical batteries with a diameter of 46 mm) at its Cheonan plant and is conducting sample verification with customers. It is rumored that BMW decided on the 46 form factor battery cell as a new battery standard and has discussed cylindrical battery development with Samsung SDI.

As a latecomer compared to competitors, Samsung SDI has been producing small cylindrical batteries used in electronic devices such as laptops and mobile phones, holding the world's number one market share, and is considered to have sufficient competitiveness.

An industry insider said, "As Tesla's vision becomes a reality, battery companies have no choice but to meet Tesla's standards to be selected," adding, "With other automakers also focusing on cylindrical batteries, this trend is likely to continue for the time being."