China's CATL Beats Korean Rivals in EV Battery Market

Korea's world-class electric-car battery makers are being overtaken by Chinese rival CATL, which is now the world's biggest EV battery maker thanks to huge demand inside China.

CATL is expanding production bases to North America, Europe and Southeast Asia as Korean EV battery makers scramble to keep up.

CATL accounted for one-third or 32.6 percent of the global EV battery market last year, surpassing the 30.4 percent combined share of Korea's three major companies. Outside China, CATL controls 12.9 percent of the global market, more than doubling 2020's share.

And China's BYD, the only company that makes both EVs and rechargeable batteries, saw its battery market share double to 11.9 percent, catching up with LG Energy Solution’s 13.8 percent. It recently joined hands with CATL to win an order for 1 million batteries from Tesla, posing a threat to LGES, which already supplies batteries to Tesla.

Having won back-to-back orders from global EV makers, Chinese firms are looking to other countries to set up production bases. CATL completed its first overseas plant in Germany in 2019, where production will begin in the second half of this year.

It is also looking for a location for its first U.S. plant with a budget of W6 trillion, and recently signed an agreement with a state-run company in Indonesia to establish a W7 trillion battery ecosystem there (US$1=W1,244).

Smaller Chinese firms like EVE Energy and AESC are busy bulking up and foraying into other countries. The combined global market share of China's top five EV battery makers rose from 35.7 percent in 2020 to 55.2 percent in the first two months of this year.

Chinese companies have an advantage over their rivals because China dominates supplies of core materials such as lithium, cobalt and nickel, especially as raw material prices surge.

Park Chul-wan at Seojeong University said, "Chinese batteries are not only cheap but technologically recognized, so Korean EV battery makers now face a huge challenge."