Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
A growing pain?
This photo released by the Vermont State Police shows Chevrolet's Bolt EV catching fire in Thetford, Vermont, July 1. AFP-Yonhap
By Baek Byung-yeul
Korean battery makers asked to improve battery safety
By Baek Byung-yeul
Korea's battery industry has been seeing explosive growth, with more electric vehicles (EVs) hitting the roads around the world. EV batteries now have become a core industry item for the country's economy, taking its place alongside other sectors in which the country has already shown its dominance such as semiconductors and displays.
In response to skyrocketing demand for batteries, the most important and costly EV component, President Moon Jae-in announced the government's ambitious vision last month to make the country the battery supply chain leader by 2030.
To make it happen, the country decided to offer tax incentives to companies investing in research and development activities. Local battery companies including LG Energy Solution (LGES), Samsung SDI and SK Innovation (SKI) responded they will invest a combined 40.6 trillion won ($34.8 billion).
However, on the possible flipside of the bulky expansion, companies are also urged to improve the safety of their batteries as global carmakers have been recalling their EVs due to fire risks.
U.S. carmaker General Motors said it would expand its recall campaign of its Bolt EV equipped with LGES batteries over potential fire risks. Stating that it would recall about 73,000 Bolt EVs from the 2019 model year to 2022, the carmaker added the recall costs will be raised up to $1.8 billion.
GM had initially recalled only about 69,000 Bolt EVs produced between 2017 and 2019, but later expanded the recall target to the latest production amount. Given industry data showed that there were about 181,500 highway vehicle fires reported for 2018 in the U.S. and the vast majority of these would have been in gasoline- or diesel-powered vehicles, industry officials and analysts said EVs are relatively safer in terms of catching fire.
They added chances are slim that Korean battery makers could be excluded from global carmakers' supply chain management but the Korean battery firms are also urged to improve safety measures in cooperation with carmakers.
“The EV fire with LG batteries seems to be particular prominent because LG's batteries have been sold a lot in the global market. In a sense, we think the battery and automotive industries are experiencing growing pains. But we expect the potential fire risks could be reduced as battery firms are working on improving safety measures such as using new materials,” an industry official in the local automotive industry said.
Despite the recall announcement, eBest Investment Securities analyst Lee Anna said there is no reason for the value of LGES to be undermined, saying “the battery supply will be low starting from 2022. Also, in the U.S., batteries from Chinese makers are not allowed.”