LG Chem, Samsung SDI and SK Innovation are expected to have invested an average 20% or more in CAPEX this year compared to 2018, according to the three battery makers on Nov. 6.
In total, the threesome is estimated to have invested up to 6.1 trillion won in battery cells alone. This reflects a 26% increase from last year’s 4.5 trillion won.
The upward trend is expected to continue, industry experts say, as Volkswagen – the world’s largest carmaker – has begun to mass produce EVs from its German plant, while other countries across the world are also initiating more support for eco-friendly cars.
Among the three companies, LG Chem is expected to have invested 3.1 trillion won this year, up 39% from last year to show the biggest increase. During the like period, Samsung SDI is likely to invest 200 billion won more to 2 trillion won, while SK Innovation will invest 200 billion won more 1 trillion won.
Another boon for business is the fact that the Chinese government will be scrapping the electric car subsidies it has been providing to support its EV battery industries.
This year, LG Chem has agreed to create a joint battery business with China’s Geely Automobile. SK Innovation has joined forces with EVE Energy, while Samsung SDI will be raise its stake in its Xian plant to 65% from the current 50%.
Suppliers are now hoping for a trickle-down effect. SK Innovation alone invested 340 billion won into its Hungary battery plant, allowing suppliers such as NS, Mplus and PNE Solution to land orders of around 200 billion won altogether. Suppliers for LG Chem and Samsung SDI are expected to land up to 400 billion won of orders.
Battery investment is expected to grow next year as well, given that SK Innovation will be investing in earnest in its plant in Georgia, US. LG Chem is also considering additional investment in Poland or the US.
The Elec is South Korea’s No.1 tech news platform.