Samsung and LG Have a Battery Problem
Lithium-ion battery cells, manufactured by Samsung SDI, sit on the production line before assembly at an auto plant.
Photographer: Krisztian Bocsi/Bloomberg via Getty Images
The days of Korean tech companies lagging behind their rivals in Japan are long over. From smartphones to advanced screens, subsidiaries of Samsung and LG have market share that Japanese brands such as Panasonic should envy. One notable exception is the batteries used to power electric vehicles. Panasonic makes 36 percent of them (it’s partnered with Tesla), compared with less than 8 percent for LG Chem and 5 percent for Samsung SDI. That’s becoming a bigger deal: Worldwide demand for electric vehicles swelled 87 percent last year, to 672,000, according to SNE Research.
To increase their share of the market, LG and Samsung have been counting on demand from China, which last year made up a third of the market for electric-vehicle batteries. The Chinese government says it’ll reduce smog by putting 5 million EV cars and buses on the road by 2020. Both Korean companies have been making major investments in new production facilities in China, but a change in government policy threatens to upset their plans.