Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Korean carmakers grow reliant on Chinese batteries
Kia EV5 all-electric SUV / Courtesy of Kia
By Park Jae-hyuk
Kia set for domestic launch of EV5 using CATL's NCM batteries
Concerns are growing over the possibility of Korean battery makers losing ground in the domestic electric vehicle (EV) market, as Hyundai Motor Group's two car manufacturing units have increased their reliance on Chinese batteries.
According to industry officials on Thursday, Kia is preparing to launch the EV5 in Korea using CATL’s nickel-cobalt-manganese (NCM) batteries. Beginning the production of the midsize SUV at the Gwangju plant in the second half of the year, the sister carmaker of Hyundai Motor plans to roll out the all-electric car in Korea by the end of this year.
When Kia released the EV5 in China last year, the company chose BYD’s lithium iron phosphate (LFP) batteries, which are less expensive and have higher thermal stability than ternary batteries.
However, for sales in Korea, the automaker has reportedly decided to use CATL’s ternary batteries, which offer higher energy density and performance.
Kia has already used CATL’s NCM batteries in the Niro EV and PV5, while its Ray EV runs on the Chinese firm’s LFP batteries. Hyundai Motor has also used CATL’s NCM batteries in the Kona Electric.
Before the decision to install CATL batteries in the EV5, Hyundai Motor Group had used Chinese batteries only for small vehicles. Larger models, including Hyundai’s IONIQ 5 and IONIQ 9 and Kia’s EV6 and EV9, have used SK On's batteries.
Given the need to cut costs amid decreasing subsidies for EVs and U.S. tariffs on car imports, experts expect Chinese companies to continue threatening the position of Korean firms in the ternary battery market. As Chinese companies expand globally with their LFP batteries, Korean firms have managed to maintain their market share with ternary batteries.
“Using more Chinese batteries for larger vehicles is inevitable for Korean automakers,” said Kim Pil-soo, an automotive technology professor at Daelim University College.
In response, Korean companies are ramping up efforts to challenge China’s dominance in the LFP battery market, capitalizing on the U.S. drive to reduce reliance on Chinese products amid trade tensions under the Donald Trump administration.
LG Energy Solution is set to begin mass production of LFP batteries for EVs in late 2027 by upgrading the Tennessee battery cell manufacturing facility of Ultium Cells, its joint venture with General Motors.
SK On is reportedly considering producing LFP batteries for EVs at U.S. BlueOval SK plants, its joint venture with Ford Motor. Samsung SDI is also said to be in talks with GM about producing LFP batteries for EVs at the Indiana plant of their joint venture, Synergy Cells.