The European electric vehicle market has elbowed out the United States to become the world’s second largest EV market last year, raising expectations that Korea’s top three battery makers that have made inroads into the market earlier than their global peers would benefit the most.
According to market research firm SNE Research on Sunday, the European EV market has fast ascended to the world’s No. 2, with the total battery usage registered more than doubling on year as of November. This is in stark contrast to the usage in China and the United States that plunged almost 30 percent, each, over the cited period.
The global consumption of EV batteries as of November last year reached 10.7 gigawatt-hours (GWh), down 23.4 percent from the previous year.
From January to November, the EV battery use jumped a whopping 92 percent on year to 20.9 GWh in Europe, while China saw an 18.3 percent rise. It was also larger than 16.5 GWh in the U.S.
Industry experts say the serious fall in the world’s two biggest economies was driven by the Chinese government’s decision to reduce subsidies and the economic slowdown in the U.S. The European market, however, is growing faster than expected on the back of the European Union’s strong support for eco-friendly vehicles, said an industry insider. BMW and Daimler AG have to sell EV labels of 93,000 units and 101,000 units, respectively, in Europe this year to avoid the fine.
Thomas Peckruhn, vice-president of Germen automotive industry association ZDK, in a recent media interview warned of the facing challenges, saying “If the car dealers cannot meet the electric vehicle sales quotas set by the manufacturers, 2020 could be a disaster.”
Markets expect Korean battery makers to become unexpected beneficiaries from the move. LG Chem already decided to build manufacturing facilities in Poland in 2016, with two other makers of Samsung SDI and SK Innovation also seeking to ramp up their battery output in Hungary since 2017 and 2018, respectively.
Chinese battery maker CATL, the world’s largest EV battery manufacturer, broke ground on a plant in Germany at the end of last year, and Japan’s Panasonic has yet to secure any manufacturing base in Europe.
The Korean trio now are actively reviewing an output increase in each European plant. Samsung SDI is mulling an additional investment to build the second factory in Hungary with an annual output of almost tripling that of the existing line.
SK Innovation, which has a manufacturing line with an annual output of 7.5 GWh in Hungary, announced its ramp up plan already last year. The first line will be fully operational within the first half of this year, and the company now is seeking another European site to add 6 GWh to its output.
LG Chem with the third largest share in the global EV battery market has expanded its output of the Poland plant from 6 GWh to 15 GWh. Its total output in Europe is estimated to reach over 50 GWh at the end of this year, beating the global No. 2 Panasonic, according to market experts.
By Won Ho-sup and Lee Ha-yeon
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