EV battery market grows, China gains ground: Korean firms face ESS, LFP challenges

The global electric vehicle battery market continued its double-digit growth in the first half of 2024, with total battery usage reaching 608.5 GWh, a 20% increase year-on-year. However, this expansion has disproportionately benefited Chinese manufacturers, widening the gap in market share.

LG Energy Solution recorded a 8.4% increase in battery usage, supplying major automakers like Tesla, Hyundai Motor Group, GM, and Volkswagen. Despite this growth, its market share slightly decreased from 9.6% to 8.6%. SK On saw a 6.7% decline in battery usage, with its market share dropping from 4.0% to 3.1%, attributed to adjustments in EV sales and production plans by some North American and European clients.

In contrast, Chinese companies dominated the top rankings. CATL, the world's largest battery maker, saw its usage surge by 25.3%, while BYD maintained its second position with a 1.6% increase. CALB also experienced significant growth, expanding by 39.5%. Combined, the seven Chinese companies in the top 10 now hold a 72.4% market share, an increase from the previous year.

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The growth of the global EV battery market has tilted more towards Chinese companies in the first half of the year.

SNE Research attributes this trend to Chinese firms leveraging their vast domestic market, the cost competitiveness of lithium iron phosphate (LFP) batteries, and rapid product development. Korean and Japanese companies, meanwhile, have faced slower growth due to regional sales and production adjustments by their key customers.

Industry analysts suggest that Korean battery manufacturers must diversify their product and market portfolios beyond EV batteries. Expanding into energy storage systems (ESS) and LFP batteries is seen as crucial for future competitiveness. SNE Research noted that the global ESS battery market grew by 71% in the first half of the year. Future success will depend not only on production scale but also on operational efficiency, customer diversification, product mix (including LFP and next-generation cylindrical batteries), and supply chain regulatory compliance.

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Future competitiveness will be determined not only by simple production scale but also by the operational efficiency of regional production bases, customer diversification, product mix such as lithium iron phosphate and next-generation cylindrical batteries, and the ability to respond to supply chain regulations.