Hyundai Motor’s IONIQ 5 N high-performance electric vehicle / Courtesy of Hyundai Motor
Carmakers urged to self-develop batteries amid rivalry with Chinese EVs: expert
By Lee Min-hyung
Hyundai Motor’s decision to source electric vehicle (EV) batteries in-house is putting pressure on local battery manufacturers, who might face potential declines in sales from the nation’s largest carmaker and other companies that may follow suit, experts and industry officials said Monday.
According to the car industry, Hyundai plans to start trial production for all-solid-state batteries by the end of 2025. The exact timeline for its commercialization has yet to be fixed, but once the plan turns into a reality, the carmaker can drastically reduce its EV prices and speed up the popularization of all electric cars.
Hyundai has mostly relied on SK On, CATL and LG Energy Solution for its EV batteries. Batteries make up almost half the price of EVs, so carmakers cannot cut the price for their EVs without bringing battery development in-house.
Experts expect Hyundai Motor and a group of other carmakers to gradually reduce their reliance on battery makers by speeding up research on batteries. Global automakers, such as Toyota Motor, BMW and Ford, are also increasing their research budgets to develop batteries on their own.
“A key challenge Hyundai Motor faces now is the rapidly growing presence of price-competitive Chinese EVs,” Lee Ho-geun, an automotive engineering professor at Daedeok University, said.
Hyundai Motor has no choice but to find a way to cut the price for its EVs amid the growing rivalry with Chinese firms, as such, the carmaker should develop EV batteries on its own, according to the professor.
For instance, BYD has achieved robust sales growth abroad in recent years, as the Chinese EV maker gained price competitiveness by producing and developing its own batteries.
“As key materials for lithium-ion batteries are still sourced from China, Hyundai Motor prefers to internally develop all-solid-state batteries,” he said.
EVs equipped with the batteries from Hyundai Motor are forecast to be available for sale as early as around 2030.
Samsung SDI’s battery prototype is displayed at its booth on the sidelines of this year’s CES tech fair in Las Vegas, Jan. 10. Courtesy of Samsung SDI
All-solid-state batteries are oftentimes called dream batteries here, as they come with a string of key upsides, such as lower explosion risks and higher energy density.
Korean battery firms are also speeding up their research on batteries. Samsung SDI has plans to commercialize its all-solid-state batteries by 2027 to take the lead in the global drive for faster development of next-generation batteries.
The local battery industry believes that carmakers will not be able to produce batteries in-house in a short period of time, as their expertise lies in manufacturing and assembly.
“The development of batteries is far from such production processes, but more like a chemistry, so carmakers’ push to [develop batteries in-house] will be time-consuming,” an official from the battery industry said.
Carmakers, including Hyundai Motor, will also have to carry out enough safety tests for their batteries, as any fires or safety issues in EVs equipped with their own batteries could quickly damage their reputation and brand recognition, officials said.
Despite the outlook, the plans of carmakers to manufacture batteries in-house should serve as a wake-up call for battery firms, as their revenue structure is still heavily reliant on battery orders from carmakers, the official said.
