Competition between Korean and Chinese battery corporations targeting Europe's electric-vehicle battery market is expected to intensify. CATL of China, the world's No. 1 battery corporation by market share, is accelerating its push into Europe as it has decided to build a third plant there. Korea's three battery corporations — LG Energy Solution, Samsung SDI, and SK On — have EV battery plants in Europe.
Once CATL's battery plant in Europe begins mass production, automakers that had contracts with Korea's three battery corporations could shift part of their orders to CATL. That is because automakers have increasingly sought to diversify their battery supply sources. However, Korean battery materials corporations with plants in Europe will have a chance to win CATL as a new customer.
According to foreign media and the battery industry on the 7th, the joint venture between CATL and Stellantis held a groundbreaking ceremony for a battery plant in Aragon, Spain, on the 26th of last month (local time). CATL plans to produce lithium iron phosphate (LFP) EV batteries with an annual capacity of 50 gigawatt-hours (GWh) at this plant. The capacity is enough to supply about 700,000 to 1 million electric vehicles, with partial operation to begin at the end of 2026 and full completion targeted for 2028. CATL and Stellantis will invest 4.1 billion euros, and the European Union (EU) is expected to provide 300 million euros in subsidies.
CATL is already operating one plant in Europe and building another. CATL's Germany plant, with a capacity of 14 GWh, began producing EV batteries at the end of 2022. The 100 GWh plant under construction in Debrecen, Hungary, will start battery production early next year. On top of that, it has decided to build a plant in Spain.
CATL is increasing its European plants because Europe is the last EV market that Chinese corporations can target. By size, China ranks first in the global EV market, Europe second, and the United States third.
China's EV market is already dominated by Chinese battery corporations such as CATL. The U.S. market is out of reach for Chinese corporations. Since President Donald Trump took office, the U.S. government has imposed massive tariff on Chinese corporations. That is why Europe is seen as the last remaining market.
Korean battery corporations also have little choice but to focus on Europe's EV market. It is difficult to enter the Chinese market for political reasons, and demand in the U.S. EV market has slowed as the Trump administration halted EV subsidies.
◇ The three battery corporations on edge over CATL's moves, battery materials corporations eye opportunities
CATL's aggressive moves are a threat to Korea's three battery corporations that have been concentrating on Europe. LG Energy Solution is in Wroclaw, Poland; Samsung SDI is in Göd, Hungary; and SK On is in Komárom and Iváncsa, Hungary, with battery plants for European EVs.
This was a decision that took into account that automakers' EV plants are not only in Germany but also in Eastern Europe, where labor is cheaper. But once CATL's plants in Hungary and Spain begin operation, the geographical edge held by Korea's three battery corporations will disappear.
Above all, part of the output from European plants handled by Korea's three battery corporations could shift to CATL. When announcing in 2022 that it would establish its Hungary plant in Debrecen, CATL noted that it is "close to customers' auto plants such as Mercedes-Benz, BMW, Stellantis, and Volkswagen."
The customers CATL mentioned overlap considerably with those of the three Korean battery corporations. Major customers of LG Energy Solution's Poland plant include Volkswagen, Ford, Renault, and Volvo. Major customers of Samsung SDI's Hungary plant are BMW, Volkswagen, and Stellantis, and major customers of SK On's Hungary plant are Ford and Volkswagen.
A battery industry official said, "It is hard to find an automaker that is not a CATL customer, as most brands' EVs use CATL batteries," adding, "As EV supply increases, automakers tend to sign with multiple battery companies, so part of the Korean battery volume could be diverted."
However, industry participants agree that when full-on competition with CATL in Europe begins depends on how quickly the Hungary plant settles after entering mass production early next year. To operate plants in Europe, they must not only hire local European workers but also utilize Europe's battery supply chain to meet EU environmental regulations. It also took Korea's three battery corporations considerable time for their European plants to reach production yield levels comparable to Korean plants.
An industry official said, "CATL has produced batteries recognized worldwide at its plants in China, but the situation could be different in Europe," adding, "If it overcomes changes in workforce, regulation, and supply chains and achieves early stabilization, CATL's strength would be undeniable, but for now we have to wait and see."
Another official said, "LG Energy Solution and Samsung SDI have operated plants in Europe since 2018, and SK On since 2022, and they have successfully settled," adding, "We need a little more time to see whether CATL can successfully run the 100 GWh plant in Hungary."
While Korea's three battery corporations in Europe will compete with CATL, Korean battery materials corporations such as EcoPro appear poised to benefit. As long as Europe's EV market grows, they can secure CATL as a customer as well as Korea's three battery corporations. Reflecting this, battery materials corporations have recently begun to step up their push into the European market.
Solus Advanced Materials is operating an EV copper foil (battery foil) production base in Hungary. On the 26th of last month, Solus Advanced Materials said it signed a supply contract for 20,000 tons of copper foil with a Chinese battery manufacturer ranked in the global top 10. Production will begin at the end of 2026, with full-scale mass production starting in 2027.
LOTTE Energy Materials is building a copper foil plant in Catalonia, Spain, with an annual capacity of 30,000 tons. Completion is targeted for the second half of 2027. SK nexilis is also nearing completion of the copper foil plant it broke ground on in Poland in July 2022.
EcoPro held a completion ceremony on the 28th of last month for a cathode materials plant in Debrecen, Hungary, with an annual capacity of 54,000 tons (t). EcoPro BM, EcoPro's cathode materials subsidiary, plans to produce high-nickel ternary cathode materials for ternary batteries at the Hungary plant starting next year. The output will be enough to supply about 600,000 electric vehicles. EcoPro BM will then broaden its lineup to mid-nickel and cathode materials for LFP in line with customer demand.
Joo Min-woo, an analyst at NH Investment & Securities, said, "Chinese cathode manufacturers are entering Europe, but domestic battery companies cannot rely 100% on Chinese cathodes," adding, "EcoPro BM, the only company operating a local plant in Europe, could gain a windfall."