TU-TESL

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Although the power business of the three major battery manufacturers in South Korea accelerated in 2019, the anxiety and challenges faced by them in the future are still hard to hide behind the scenery. Influenced by the acceleration of global automobile electrification process, Samsung SDI, LG Chemical and ski, three Korean battery giants, have significantly accelerated the construction of their global power battery capacity. At the same time, the above three enterprises also reaped huge battery orders in 2019, and the revenue of battery business increased significantly, thus improving the profitability of the Department, or even turning losses into profits. According to the location of capacity layout and time nodes of production expansion of the three enterprises, Samsung SDI, LG Chemical and ski will start to work from 2020, and are full of confidence in their future power battery business development prospects and global power market. It is worth noting that although Korean battery companies are continuously increasing their power business, they are also facing a series of "internal and external problems", so it remains to be seen whether the three battery giants can achieve their strategic goals in the future. Compared with 2018, Samsung SDI, LG Chemical and ski significantly increased investment in the field of power battery in 2019, and spent a lot of money to expand production capacity. The purpose is to maintain a leading position in power battery capacity, start to release in 2020 and reach hundreds of GWH by 2025. From the perspective of layout and production time, Samsung SDI, LG Chemical and ski adopt similar market strategies and customer objectives, which are mainly concentrated in China and Europe and the United States, indicating that these three battery companies will have direct and fierce competition in the future. Samsung SDI: in 2019, Samsung SDI further increased its shareholding ratio in the joint venture company Samsung ring new (Xi'an) Power Battery Co., Ltd. at a price of 34 million US dollars (about 239 million yuan), from 15% to 65%, becoming the new largest shareholder of Samsung ring. This move is regarded as a signal for Samsung SDI to re Code China's power market in order to restore its strength in China's power battery market and prepare for market competition after cancellation. Once the subsidy declines completely, Samsung may further strengthen its dominant position in the joint venture, not excluding that it may become the new sole shareholder of Samsung ring in the future. In the process of increasing the shareholding ratio, Samsung SDI also restarted the new capacity expansion plan of Samsung ring. The new project will build a 5.4 million 120ah lithium-ion power battery production line, a 5.4 million 37AH lithium-ion power battery production line, and add 221 sets of lithium-ion battery production line equipment. In addition to expanding China energy, Samsung SDI is also actively expanding the capacity of its European plants. In October 2019, Samsung SDI plans to invest about 9.2 billion yuan to expand its Hungarian power battery plant, which can meet the battery demand of 50000 electric vehicles. In addition, Samsung SDI also announced that it will invest 62.7 million US dollars (about 434 million yuan) to build a power battery factory near Detroit, Michigan, which will serve as the battery manufacturing plant, R & D center and automobile battery operation headquarters of Samsung SDI USA. At present, Samsung SDI's core customers include,,, etc. Meanwhile, Samsung SDI is negotiating with, India Mahinda and other host plants about the supply plan of electric vehicle battery packs, and actively promoting the signing of supply contracts. It is worth noting that driven by customer power battery demand and ESS sales growth at home and abroad, Samsung SDI's lithium battery business increased significantly in 2019, and even turned a loss to profit in the third quarter, and was optimistic about the fourth quarter. In November, Samsung SDI and BMW signed a battery supply contract worth 2.9 billion euros (22.605 billion yuan), with the supply time from 2021 to 2031; in September, Samsung SDI signed an agreement with akasol, the German power battery system manufacturer, which will supply akasol with lithium battery cells and modules with a total capacity of 13gwh from 2020 to 2027; in July, Samsung SDI and Volvo signed an agreement The group has formed a strategic alliance. Samsung SDI will supply battery units and modules for Volvo's electric trucks and assemble them in its factories. LG Chemical: in July 2018, LG Chemical announced to invest US $2 billion to build a 32gwh power battery plant in Nanjing, China. The factory started construction in October of the same year, and has been in mass production in October 2019. In January 2019, foreign media reported that LG Chemical planned to invest a total of 1.2 trillion won (US $1.07 billion) to expand two battery plants in China by 2020. In October, LG Chemical released regulatory documents saying it would invest 417 million US dollars (2.947 billion yuan) in its wholly-owned subsidiary, LG Chemical's Nanjing plant, to meet the needs of electric vehicle manufacturers. In June of the same year, LG Chemical announced the establishment of a joint venture company with Shanghai Huapu Guorun (auto holding subsidiary), which will form a production capacity of 10gwh after the project is completed. At the same time, in 2019, LG established strategic partnership with Tianqi lithium, Huayou cobalt, Enjie, Ganfeng lithium, and Greenland and other Chinese power battery industry chain enterprises in terms of upstream materials, and even won the battery order of Shanghai factory. From the perspective of the above layout projects, LG Chemical has taken China as one of its most important markets in the future. After a series of layouts, its market in China has begun to take shape. In the later stage, we may cooperate with more Chinese main engine factories and battery factories to quickly enter the Chinese market. In addition, LG Chemical is expanding its battery capacity in Europe and the United States. On the one hand, it plans to invest 577 million US dollars (3.9 billion yuan) to expand its Polish plant; on the other hand, it plans to establish a joint venture with GM in the United States. In terms of battery orders, LG Chemical's installed capacity of power battery increased significantly in 2019, mainly due to the increase in sales of electric vehicles in its main engine plant. At present, LG Chemical mainly supplies power batteries for Volkswagen, general motors, Chrysler, Renault and other international OEMs, and has signed a 10-year supply agreement with Volvo. Based on the continuous growth of lithium battery demand in the future, LG Chemical also plans to achieve a revenue of 26.7 billion US dollars (183.834 billion yuan) in 2024, and the sales volume of lithium battery is expected to reach 356gwh. Ski: compared with Samsung SDI and LG Chemical, ski's power battery business scale is smaller and the market starts later, but since 2017, it has increased investment in power battery field. Its goal is to rank third in the global battery market share of electric vehicles in 2025. Since 2018, ski's investment in this field has been equal or even more than that of its friends. It plans to achieve a lithium battery capacity of more than 100GWh in 2025. In 2019, more than one battery capacity expansion project of ski was implemented, and multiple battery orders were obtained. In August 2018, ski, BAIC Motor Corporation and Beijing Electronic Holding Co., Ltd. established Beidian este in Changzhou, Jiangsu Province, with a capacity planning of 7.5gwh. On December 5, 2019, Beidian Astor officially completed and put into production, and will produce ncm811 soft pack battery. In the same month, ski plans to invest $1.05 billion (7.38 billion yuan) to build a new power battery factory in Yancheng, Jiangsu Province, which mainly supplies Dongfeng Yueda automobile in Yancheng. In addition, ski and Yiwei lithium energy will set up a joint venture in China to produce soft pack power batteries. At the same time, ski is expanding its capacity in Hungary and building new battery plants in the United States. It is also reported that ski will also cooperate with Volkswagen to build a battery factory in Germany. Since ski won a huge battery order from Volkswagen in 2018, the power business of ski has continued to grow in 2019, becoming the battery supplier of many main engine plants. Up to now, ski has become the battery supplier of Daimler, Volkswagen, Hyundai, Kia, and other international automobile enterprises, and is discussing cooperation with other main engine manufacturers. The hidden worry behind the three giants from the above three enterprises' capacity layout and order situation, Samsung SDI, LG Chemical and ski's power business made great progress in 2019, which laid a foundation for them to compete for the global power market from 2020. It is worth noting that although Samsung SDI, LG Chemical and ski have certain leading advantages in product quality, technology, scale and customer group, they still face pressure and challenges in the future. On the one hand, the competition in the power battery market is intensifying, and the competitors are rising rapidly. In addition to Korean battery companies, Chinese, Japanese and European battery companies, including Panasonic, northvolt and so on, are also making efforts in the international power market, forming a direct impact and challenge on three Korean battery companies. On the other hand, the battery price continues to decline, and corporate profits are weak. Due to the fierce market competition and the pressure of cost reduction, at present, the main engine manufacturers are asking the battery manufacturers to reduce prices significantly, which leads to the decline of the profitability of the battery enterprises. At present, the battery businesses of Samsung SDI, LG Chemical and ski are in the state of loss or break even as a whole. However, the continuous decline of battery price and the continuous increase of investment may make the above three battery enterprises in the state of loss for a long time, and the profit space of enterprises is limited. In addition, there is also a "life and death crisis" among Korean battery enterprises. At present, LG Chemical and ski are in a fierce patent litigation, neither of them is willing to settle, or even put forward a lawsuit to restrict their production and sales of power batteries in the United States. Once losing the lawsuit, the blow to one party will be fatal. "If this fight continues, no matter who loses or wins, the two companies will suffer a fatal blow unless they reach a settlement. And it's a setback for automakers. " The intensity of the fight worries South Korean officials, as it could damage both companies' reputations and allow other competitors to take market share from them. In general, a series of layout actions of Samsung SDI, LG Chemical and ski are more like a gamble, which also shows that the three companies are facing great pressure and challenges in the power market, especially in how to improve the profitability and market share of their battery sector.