[At Risk: Korean Advanced Industries] Chinese CATL's Massive Supply Push Surpasses Sales of Korea's Top 3 Battery Makers

CATL Records $13 Billion Sales in First Half
Holds 30% of Electric Vehicle Battery Market
Supply Chain Restructuring Signals Shift in Landscape

[Asia Economy Reporter Jeong Dong-hoon] Chinese battery manufacturer CATL's first-half sales surpassed the combined sales of the three Korean battery companies, securing an overwhelming first place. As of the first half of this year, the global electric vehicle battery market reached approximately 59 trillion won, and China's aggressive offensive, fueled by massive domestic demand and policy support, is increasingly intensifying its global influence.

According to data compiled on the 14th by energy market research firm SNE Research, the total global electric vehicle (BEV·PHEV) battery sales in the first half of this year amounted to $42.73 billion (about 58.7 trillion won). Among them, China's CATL accounted for $13 billion (about 17.9 trillion won), representing 30% of the entire market. Following was LG Energy Solution with $5.84 billion (about 8 trillion won), holding a 14% market share. Next were China’s BYD in third place (5.3 trillion won, 9%), Samsung SDI in fourth (4.1 trillion won, 7%), Japan’s Panasonic in fifth (3 trillion won, 5%), and SK On in sixth (2.8 trillion won, 5%).

The combined electric vehicle battery sales of the three Korean battery companies?LG Energy Solution, Samsung SDI, and SK On?in the first half of this year totaled $10.89 billion (about 15 trillion won, 26%), which was less than the sales of CATL alone.

Among companies, Samsung SDI had the highest average battery pack price at $183 per kWh. This is likely because Samsung SDI has a relatively high sales proportion of plug-in hybrid vehicle batteries, which have a higher average price. Panasonic had the lowest average price at $112 per kWh, influenced by the sales price of cylindrical batteries mainly supplied to Tesla. The average price per kWh was analyzed as $150 for LG Energy Solution, $125 for CATL, and $119 for SK On.

Although the three Korean battery companies continue to show rapid growth, CATL's volume offensive is fierce. In 2020, when demand for renewable energy and eco-friendly electric vehicles began to surge due to the spread of COVID-19, the market share of the three Korean battery companies (34.7%, based on battery usage) was ahead of CATL (24.6%).

However, this structure changed as CATL established large-scale mass production systems in China and Europe from the second half of 2020 through last year. CATL’s market share rose from 24.6% to 32.6%, an 8 percentage point increase, and BYD, the fourth-largest Chinese company, also showed an upward trend from 6.7% to 8.8%, a 2.1 percentage point increase. Meanwhile, the three Korean companies all saw their market shares decline from 34.7% in 2020 to 30.4% last year, a 4.3 percentage point drop.

However, due to the U.S.-led global supply chain restructuring, including the Inflation Reduction Act (IRA), the battery market is facing another turning point. Korean battery companies, which have partnered with all three major U.S. automakers, are expected to produce more than 500 GWh of batteries annually in North America by 2025. Considering that 1 GWh of battery packs can typically produce 15,000 electric vehicles, Korean battery companies will be able to produce batteries for approximately 7.5 million electric vehicles annually in North America alone.

Currently, U.S. automakers such as GM, Ford, and Stellantis are continuing trillion-won scale investments locally in North America not only with Korean battery cell manufacturers like LG Energy Solution, SK On, and Samsung SDI but also with material companies such as POSCO Chemical and EcoPro BM.