SEOUL, March 16 (Yonhap) — Shares in South Korean battery makers plunged Tuesday after Volkswagen announced plans to produce its own batteries and gradually switch the type of battery used in its electric vehicles.
The German carmaker said Monday it will build six battery factories in Europe to have a total capacity of 240 gigawatt-hours by 2030 and launch a new “unified” prismatic battery cell for its EVs in 2023.
Volkswagen’s battery announcement drove down shares of the Korean battery trio on the Seoul bourse Tuesday on concerns that the world’s No. 2 carmaker by sales could reduce reliance on their supplies.
LG Chem Ltd. and SK Innovation Co., which have been making pouch-type batteries for Volkswagen were hit hard by the automaker’s plan to gradually switch to unified prismatic battery cells by 2030.
LG Chem, which wholly owns battery making division LG Energy Solution Ltd., saw its shares plummet 7.76 percent to 891,000 won (US$788.5), the largest daily loss this year, while SK Innovation tumbled 5.69 percent to 215,000 won.Samsung SDI Co., which provides prismatic cells to Volkswagen, remained relatively unscathed, with its share edging down 0.87 percent to 680,000 won.
Market watchers say Volkswagen’s in-house production plan and switching cell design is expected to affect the Korean battery makers’ bid to expand shares in the European market.
“Volkswagen’s plan to adopt the unified cell design from 2023 is negative news for pouch-type suppliers for the carmaker, including LG Energy Solution and SK Innovation,” Kim Jung-hwan, an analyst at Korea Investment & Securities, said. “According to the plan, the Korean battery makers’ shares in Volkswagen’s EVs are expected to decline from 2025.”
The German automaker’s plan comes at a time while LG and SK are wrangling over a lawsuit in the United States over a trade secret case related to EV battery technology.
Last month, the U.S. International Trade Commission sided with LG in the trade secret case and issued a 10-year import ban on SK Innovation, while giving temporary permits to batteries and components needed to make products for Ford and Volkswagen in the U.S. in order to allow them to find new partners.