As European battery corporations go bankrupt one after another, competition between Korea and China over the European battery market is expected to intensify. The global battery market is largely divided into the United States, China, and Europe. In the United States, which is keeping Chinese corporations in check, Korean corporations have the advantage. China is effectively a market dominated by Chinese corporations. Ultimately, the biggest battleground for Korean and Chinese battery corporations is Europe. Korean battery corporations entered Europe earlier than China and seized the market. However, attention is turning to the outcome of the competition as China's CATL, the world's No. 1 battery corporation by market share, is accelerating its push into Europe, including a decision to build a third plant there.
According to the battery industry and major foreign media on the 20th, the board of directors of Norwegian battery corporation Morrow Batteries decided on the 6th to file for bankruptcy. Morrow Batteries began commercial production in January and completed its first delivery in April, but it could not overcome a slowdown in battery demand in Europe and a funding crunch. Failure to secure long-term financing needed to continue large-scale mass production of batteries and expand plants is cited as the reason for the decision to file for bankruptcy.
With Morrow Batteries' bankruptcy filing, European local battery corporations have effectively disappeared. Northvolt of Sweden, once Europe's most anticipated battery player, also filed for bankruptcy in March last year. Canceled orders from automakers such as BMW and mass-production delays caused by failure to secure Production yield were the reasons. Subsequently, U.S. battery startup Lyten acquired asset such as Northvolt's Swedish plant in August last year.
European battery corporations' market share had been negligible, but with no local European battery corporations remaining, competition between Korean and Chinese corporations in Europe is expected to grow fiercer. Korea's three battery makers—LG Energy Solution, Samsung SDI, and SK On—have been building battery plants in Europe since the late 2010s and aim to reap first-mover benefits through stabilizing Production yield.
Among Korea's three battery makers, the corporation that entered Europe first was Samsung SDI. Samsung SDI completed a plant in Göd, Hungary, in May 2017. Facilities that had been used in the early 2000s as Samsung SDI's plasma display panel (PDP·Plasma Display Panel) plant were converted into a battery plant. Samsung SDI is manufacturing nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminum (NCA) batteries for electric vehicles in Hungary.
LG Energy Solution also entered Europe the same year. LG Energy Solution completed a battery plant in Wrocław, Poland, in July 2017 and has been mass-producing NCM batteries for electric vehicles and lithium iron phosphate (LFP) batteries for energy storage systems (ESS). SK On has three plants in Hungary. Its first Hungary plant began operations in 2020, the second in 2022, and the third in 2024. SK On's main products are NCM batteries for electric vehicles.
China, a late entrant, is speeding up construction of plants in Europe. CATL began producing batteries at its German plant at the end of 2022 and built a 100 GWh plant in Debrecen, Hungary. The plant boasts the largest capacity in Europe. CATL also plans to build its third European plant in Spain. BYD is simultaneously building electric vehicle and battery plants in Hungary, and China's EVE Energy is also constructing a battery plant in Hungary.
Europe had been considered a stronghold for Korean battery makers, but China's push into Europe with LFP batteries is a threat. In response, LG Energy Solution is expected to start mass production of LFP batteries for electric vehicles at its Poland plant soon. It is also reviewing production of cylindrical 46 batteries used in premium electric vehicles.
In the battery industry, many say that it will take considerable time for CATL's European plants to take root, so competition with Korean battery makers is not yet significant. To operate a plant in Europe, corporations must hire local European workers and establish a European battery supply chain in line with the European Union (EU) environmental regulations. Over roughly 10 years, Korea's three battery makers have adapted locally in Europe and achieved Production yield on par with their Korean plants.
Above all, the question of whether Chinese corporations, including CATL, can enjoy their greatest strength—price competitiveness—in Europe could be a competitive point for Korean corporations. According to SNE Research, the battery production cost of Chinese companies increases by 10% to 20% in Europe compared with China. That is because labor costs rise when operating battery plants in Europe, and expense increases in the process of meeting Production yield. In a recent report, SNE Research said, "Korean companies' battery production cost is around $90 per kilowatt-hour (kWh), which is at a disadvantage compared with Chinese companies, but it is competitive in Europe."
A battery industry official said, "As competition for local production in Europe becomes full-fledged, not only the simple cell price but also production stability, Production yield, and supply reliability are important competitive factors," adding, "Korean battery companies can be seen as having sufficiently differentiated competitiveness."