By Baek Byung-yeul
Hyundai Motor Group Executive Vice Chairman Chung Euisun will meet SK Group Chairman Chey Tae-won this week, as the carmaker scrambles to form a more stable supply chain for electric vehicle (EV) battery cells ahead of an expected EV boom, according to industry sources, Sunday.
According to the sources, Hyundai's executive vice chairman is expected to have a business meeting with SK Group's chairman at the latter's battery-making affiliate SK Innovation's factory in Seosan, South Chungcheong Province, early this week.
This will be Chung's third meeting with chiefs of local battery makers following meeting with Samsung Group leader Lee Jae-yong on May 13 and LG Group leader Koo Kwang-mo on June 22.
Given the Hyundai Motor chief shared visions for the EV battery cell sector and promoted friendly relations with LG and Samsung that are actively expanding into the lucrative business during the previous meetings, Chung is expected to have a similar talk with Chey regarding strengthening partnerships between the two.
The Hyundai leader's series of meetings with chiefs of local battery makers comes amid skyrocketing demand for secondary batteries, which will be increasingly used for EVs. The automotive industry is rapidly experiencing a significant paradigm shift from gas-powered cars to EVs.
On July 2, U.S.-based EV maker Tesla has set a key milestone as it became the world's most valuable carmaker, overtaking Japanese car giant Toyota, which sold 30 times more cars last year than Tesla. Shares of the American carmaker closed at $1,208.66 with a total market capitalization of $224.1 billion.
While Tesla is leading the paradigm shift, EV sales will explosively increase in the next few years. According to data by Mirae Asset Daewoo Securities, more than 16 million EVs will be sold across the world in 2025, a significant increase from around 3.2 million in 2019.
The European Union has been forcing carmakers selling their cars there to produce more EVs so that the companies can meet the new average CO2 emission target of 95 grams per kilometer. Also Chinese EV makers are actively trying to enter the global EV market with more competitive models.
In this situation, securing a stable supply chain of battery cells has become a must for carmakers and there is no exception for Hyundai Motor Group, which is aggressively venturing into the EV business.
After the LG-Hyundai meeting, LG Group announced LG Chem has been selected as a second supplier to supply its EV battery cells to Hyundai's upcoming EV models that are expected to come out on its EV-only platform called Electric-Global Modular Platform (E-GMP).
Given battery cell vendors have been reluctant to unveil details of contracts with their buyers, industry analysts said LG's official statement mentioning the E-GMP represents the two conglomerates' staunch alliance.
To take the leadership in the EV market, Hyundai has been betting big on E-GMP as the platform is designed for only EVs and uses 800 volts, which is twice the voltage of most EVs on the road today. Hyundai previously announced it will release 23 EV models and sell 1 million EVs by 2025.
SK Innovation is also a part of the suppliers' list that will supply its battery cells to Hyundai's new EV platform. Although the exact contract details are not available, SK Innovation is thought to have signed a contract worth 10 trillion won ($8.3 billion) to supply its batteries to Hyundai for the next five years.
Though SK Innovation is a late comer in the EV business, the company's market share has been improving steadily. According to market tracker SNE Research, the company's market share during the January-May period was at 4.1 percent, placing seventh behind its local rivals LG Chem, which has the largest share with 24.2 percent, and Samsung SDI in fourth position with 6.4 percent.
For SK Innovation, which aims to become one of the global top five battery makers, strengthening its partnership with Hyundai Motor is essential. Currently the company has three EV battery manufacturing facilities in operation in Korea, China and Hungary. SK Innovation, which is also building its first U.S. factory in Georgia, aims to increase its battery cell production capacity to 100 gigawatt-hours by 2025.
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| Hyundai Motor Group Executive Vice Chairman Chung Euisun |
According to the sources, Hyundai's executive vice chairman is expected to have a business meeting with SK Group's chairman at the latter's battery-making affiliate SK Innovation's factory in Seosan, South Chungcheong Province, early this week.
This will be Chung's third meeting with chiefs of local battery makers following meeting with Samsung Group leader Lee Jae-yong on May 13 and LG Group leader Koo Kwang-mo on June 22.
Given the Hyundai Motor chief shared visions for the EV battery cell sector and promoted friendly relations with LG and Samsung that are actively expanding into the lucrative business during the previous meetings, Chung is expected to have a similar talk with Chey regarding strengthening partnerships between the two.
The Hyundai leader's series of meetings with chiefs of local battery makers comes amid skyrocketing demand for secondary batteries, which will be increasingly used for EVs. The automotive industry is rapidly experiencing a significant paradigm shift from gas-powered cars to EVs.
 |
| SK Group Chairman Chey Tae-won |
While Tesla is leading the paradigm shift, EV sales will explosively increase in the next few years. According to data by Mirae Asset Daewoo Securities, more than 16 million EVs will be sold across the world in 2025, a significant increase from around 3.2 million in 2019.
The European Union has been forcing carmakers selling their cars there to produce more EVs so that the companies can meet the new average CO2 emission target of 95 grams per kilometer. Also Chinese EV makers are actively trying to enter the global EV market with more competitive models.
 |
| Workers walk among a row of Tesla Model 3 electric vehicles at Tesla's primary vehicle factory after CEO Elon Musk announced he was defying local officials' COVID-19 restrictions by reopening the plant in Fremont, Calif., May 11. / REUTERS-Yonhap |
In this situation, securing a stable supply chain of battery cells has become a must for carmakers and there is no exception for Hyundai Motor Group, which is aggressively venturing into the EV business.
After the LG-Hyundai meeting, LG Group announced LG Chem has been selected as a second supplier to supply its EV battery cells to Hyundai's upcoming EV models that are expected to come out on its EV-only platform called Electric-Global Modular Platform (E-GMP).
Given battery cell vendors have been reluctant to unveil details of contracts with their buyers, industry analysts said LG's official statement mentioning the E-GMP represents the two conglomerates' staunch alliance.
To take the leadership in the EV market, Hyundai has been betting big on E-GMP as the platform is designed for only EVs and uses 800 volts, which is twice the voltage of most EVs on the road today. Hyundai previously announced it will release 23 EV models and sell 1 million EVs by 2025.
SK Innovation is also a part of the suppliers' list that will supply its battery cells to Hyundai's new EV platform. Although the exact contract details are not available, SK Innovation is thought to have signed a contract worth 10 trillion won ($8.3 billion) to supply its batteries to Hyundai for the next five years.
Though SK Innovation is a late comer in the EV business, the company's market share has been improving steadily. According to market tracker SNE Research, the company's market share during the January-May period was at 4.1 percent, placing seventh behind its local rivals LG Chem, which has the largest share with 24.2 percent, and Samsung SDI in fourth position with 6.4 percent.
For SK Innovation, which aims to become one of the global top five battery makers, strengthening its partnership with Hyundai Motor is essential. Currently the company has three EV battery manufacturing facilities in operation in Korea, China and Hungary. SK Innovation, which is also building its first U.S. factory in Georgia, aims to increase its battery cell production capacity to 100 gigawatt-hours by 2025.
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