South Korea’s three battery majors LG Energy Solution Ltd. (LGES), SK on Co., and Samsung SDI Co. will likely gain traction in U.S. expansion on intergovernmental backing of battery partnership and Hyundai Motor Group’s plan to create a EV and battery manufacturing site in Georgia pronounced during President Joe Biden’s state visit to Korea.

Presidents Yoon Suk-yeol and Joe Biden after summit meeting on Saturday pledged enhanced public and private cooperation “to protect and promote critical and emerging technologies, including leading-edge semiconductors, eco-friendly EV batteries, artificial intelligence, quantum technology, biotechnology, biomanufacturing, and autonomous robotics.”

The statement also declared “to continue working together to tackle immediate and long-term challenges in the supply chain ecosystem” and to “establish a regular ministerial-level supply chain and commercial dialogue to discuss promotion of resilient supply chains of key products, including semiconductors, batteries, and critical minerals.”

The intergovernmental agreement will enhance Korean battery majors’ footing in North America amid fast rise of Chinese and Japanese rivals like Panasonic, CATL, and BYD.

Korean battery makers already are primary power behind EVs in North America.

LGES has a battery joint venture with General Motor, SK on with Ford, and Samsung SDI with Stellantis.

Their business opportunities in the U.S. have widened after Hyundai Motor Group announced to invest $5.54 billion to build its first entirely EV-devoted factory in the state of Georgia, with $1 billion invested by its suppliers to include a battery site.

SK on with manufacturing plants in Georgia is a strong candidate to join the Hyundai site.

It is the battery supplier for Kia Corp.’s EV9 and Hyundai Motor’s IONIQ 5.

LGES with largest production capacity in the U.S. also could be a candidate to power Hyundai vehicles. The company is currently engaged in lithium sulphate battery development that can be applied to urban air mobility (UAM). Hyundai Motor has announced a separate $5 billion investment in UAM and robotics.

Korean secondary battery manufacturers have been keeping up aggressive research and development and facility spending to ensure their leadership in digitalization and electrification age despite surge in production cost.

According to LGES quarterly report released Sunday, its cathode material purchase price was at $34 per kilogram in the first quarter, up 56 percent from last year’s average price of $21.8.

Samsung SDI’s cathode material purchase price was also 24.2 percent higher in the first quarter this year at $32.8 per kilogram from last year’s average of $26.4.

Korean secondary battery manufacturers produce mainly nickel-cobalt-manganese lithium batteries. A rise in raw materials prices has lifted up the price of cathode materials.

Despite higher cost burden, the battery majors have been eagerly expanding.

LGES spent 909 billion won ($717.1 million) in facility expansion in the January-March period, up from 461 billion won in the same period a year ago.

In March, LGES announced to jointly invest 4.8 trillion won with U.S. carmaker Stellantis to build a secondary battery factory in Canada. The company also pledged separate 1.7 trillion won spending to build an exclusive battery factory in Arizona, U.S.

LGES investment in its global network in Poland, China, and U.S. surged to 20.6 trillion won in the first quarter from 15 trillion won in the same period last year.

Its R&D investment jumped 41.4 percent from 129.8 billion won to 183.6 billion won during the cited period. R&D accounted for 4.2 percent of total revenue in the first quarter, up from 3.1 percent last year.

LGES has also upped its staffs. A total 9,721 employees work for the company in Korea as of end of March, up 1,701 from the end of March last year.

Samsung SDI invested 569.6 billion won on facilities in the first quarter, up 79.6 percent from a year ago. R&D spending gained 30.3 percent from 198.4 billion won to 258.3 billion won. SK on is unlisted and not required to disclose the details.

According to market watcher SNE Research, total production capacity of global secondary battery manufacturers for electric vehicles is projected to grow at an annual average of 27 percent to 8,247 gigawatt hour (GWh) in 2030, up by more than 8 times from last year’s total capacity of 994 GWh.

Chinese manufacturers like CATL and BYD are forecast to make up 63 percent of total production capacity in 2030 and Korean producers 20 percent.

By Lee Chuk-bok, Won Ho-sup, and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]