South Korea’s three battery majors LG Energy Solution Ltd. (LGES), SK on Co., and Samsung SDI Co. are rushing to increase their presence in Europe after finalizing multibillion-dollar expansion schemes in North America to ensure their leadership in EV power outside China amid fast rises of Chinese competitors.

According to multiple sources from the industry sector on Monday, LGES is considering expanding pouch-type battery cell production capacity of its factory in Wroclaw, Poland, and establishing a separate production base for cylindrical batteries in Europe. The company aims to command a global capacity of more than 100 gigawatt hours (GWh) in 2025 through production bases across Korea, North America, Europe, and China.

LGES plans to double the production facilities for batteries going to its U.S. partner Ford Motor at its plant in Poland next year and further expand capacity upon demand. The company will also use its existing production line to maximize investment efficiency and carry out facility upgrade.

“We are yet to finalize the details on a new base for cylindrical battery production in Europe,” said an unnamed official from LGES. “We are looking into multiple options regarding the location as we still have extra space near the Wroclaw factory in Poland.”

SK on has been granted $2 billion in funding from export credit agencies (ECAs), the largest green funding from state agencies. The funding has been arranged by three ECAs – Euler Hermes, a trade credit insurer in Germany, Seoul-based Korea Trade Insurance Corp., and Export-Import Bank of Korea.

The funding will specifically complete its third factory in Europe under construction in Ivancsa, Hungary. The 3.31 trillion won ($2.5 billion) budgeted factory in Ivancsa will churn out 30 GWh pouch-type battery cells annually from 2024, which is enough to power 430,000 EVs.

Samsung SDI will bolster the output of high value-added, medium-large Gen 5 batteries at its second factory in Goed, Hungary, that began mass production from the second half of this year.

According to industry sources, production capacity of Samsung SDI’s factory in Hungary is expected to expand to 37 GWh in 2022, up from 13 GWh in 2020 and 24 GWh in 2021. The company could increase capacity more aggressively as it is in talks with German automaker BMW to supply medium-large cylindrical batteries with 46 diameters.

According to Korea Automotive Technology Institute, sales of pure EVs in Europe have grown at an annual average of 77.3 percent from 2018 to 2021. All-electric vehicles represented 35.3 percent of entire sales in Europe in 2020 versus 11.7 percent in the U.S. and 2.1 percent in Korea.

International Energy Agency forecast that Europe’s EV market will expand to 5.7 million units in 2025 and 13.3 million units in 2030 from 1.4 million units in 2020. The phase out and cease of state subsidies to EVs however can slow future EV sales in Europe.

By Park Yun-gu and Lee Eun-joo

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