Fortune Minerals Limited. T.FT

US EV subsidy may be golden ticket for Korean battery makers

[Allman]

The bill implies U.S. President Joe Biden’s intention to isolate Chinese EV and battery makers. Chinese battery makers, including world No. 1 Contemporary Amperex Technology (CATL), control the global battery industry with 56 percent as of the first half of this year, according to data from SNE Research. Korea has three battery makers — LG Energy Solution, SK On and Samsung SDI — and had a combined share of 26 percent.

Chinese battery makers, on the other hand, have no plants in the United States, make most of their batteries in China, and use mostly materials produced in China.

But analysts say the subsidy policy is not entirely good news for Korean companies, as they are still highly dependent on China for raw materials used in EV batteries such as nickel, cobalt and manganese. The three are key ingredients to making cathodes, which account for 40 percent of the production cost of an EV battery.
 
The largest reserves of these raw materials are found in various countries like Chile and Argentina, but China is in charge of refining the battery minerals. According to the International Energy Agency, around 70 percent of the refined minerals used for batteries come from China.
 
Around 81 percent of the lithium used by Korea’s three battery makers comes from China, according to the Korea Institute for Industrial Economics and Trade. Around 87.3 percent of the cobalt, and 99 percent of the manganese are imported from China.
 
“The bill itself is surely beneficial to battery cell and materials companies in Korea and Japan, countries that have a good relationship with the United States,” said Samsung Securities analyst Esther Yim. “But it’s difficult to manufacture batteries excluding China-made minerals in a short time. Battery makers must find an alternative means to source the raw materials by 2024.”

https://koreajoongangdaily.joins.com/2022/08/09/business/industry/korea/20220809163003753.html