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The Korea Herald
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THE INVESTOR
March 28, 2024

Automobiles

Hyundai’s China woes deepen on LG Chem batteries

  • PUBLISHED :November 25, 2016 - 17:51
  • UPDATED :November 25, 2016 - 17:51
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[THE INVESTOR] China’s tougher stance on electric vehicle batteries is expected to pose a challenge for Hyundai Motor and its smaller affiliate Kia Motors that are eyeing the world’s largest EV market.

The Korean duo is planning to release plug-in hybrid EVs in China next year but the cars are highly unlikely to benefit from government subsidies for EV purchase as their battery partner LG Chem has failed to get certifications thus far. 


Hyundai Motor’s self-driving Ioniq electric sedan



Without the cash incentives that range from 25,000 yuan (US$3,615) to 55,000 yuan, Hyundai and Kia cars will lose the price war against their cheaper Chinese counterparts that are powered by their compatriot battery makers.

Due to safety concerns, the Chinese government is refusing to approve nickel-manganese-cobalt-oxide batteries, or NMC, that are produced by leading battery makers like Samsung SDI and LG Chem, while offering benefits to lithium-ion-phosphate batteries, or LFP, a less sophisticated battery type that is adopted by Chinese battery makers.

Amid growing political tensions between Korea and China, a new round of review session has been delayed, with no immediate plan to resume.

Adding to the concerns, China’s Ministry of Industry and Information Technology proposed a revision to its EV battery certification that is expected to take effect in January.

Under the revision, the annual output capacity of EV battery manufacturers must exceed 8 gigawatt-hours, about 40 times higher than the previous requirements, among other changes. LG Chem and Samsung SDI yield 2 to 3 gigawatt-hours at their local plans, making it impossible for them to meet the requirements.

“Hyundai might have to source from a Chinese battery maker if they want to sell in the country,” said an industry source.

Chinese manufacturers BYD and Optimum Nano are the only firms that meet the output level under the revision.

But according to industry experts, EV battery replacement takes a long time as it requires a total redesign of the vehicle to fit the new battery, making it challenging for Hyundai to change its battery partner.

By Ahn Sung-mi (sahn@heraldcorp.com)

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