This is from Korean Business news. Strong read-through in relation to LG chem's postition on Cobalt security.
http://www.businesskorea.co.kr/news/articleView.html?idxno=23614
China's CATL Seeks to Push into European Battery Market
12 July 2018
China’s largest battery maker Contemporary Amperex Technology Ltd. (CATL) has decided to build a battery production base in Germany, officially declaring its advance into Europe. It means that South Korean battery producers such as LG Chem and Samsung SDI, which have considered Europe as the main market, will face more severe competition there with the Chinese company. With the Chinese government’s policy support, CATL has expanded the size of shipments and surpassed Japan’s Panasonic Corp. to become the world’s top battery maker in terms of shipments.
According to industry sources on July 11, CATL signed an agreement with the German state of Thuringia on the 9th (local time) to build a battery factory and a smart manufacturing research and development (R&D) center in Erfurt, Thuringia's capital city, by investing 240 million euro (US$282.06 million or 316.47 billion won).
CATL plans to produce lithium-ion batteries and focus on R&D at the two new buildings in Germany. It will start operating the plant from 2021 and its annual battery production is expected to reach 14 gigawatt hours (GWh) in 2022. The batteries produced here will be supplied to global car manufacturers, including BMW, Volkswagen, Daimler, Jaguar Land Rover and Peugeot Citroen Automobiles (PCA).
This is why domestic electric vehicle battery producers, like LG Chem and Samsung SDI, are forecast to be hard hit.
CATL has been expanding the shipments for Chinese electric buses backed by the Chinese government’s strong support. Therefore, LG Chem and Samsung SDI will have to share the “pie” when CATL pushes into the European market. LG Chem currently has a production base with an annual production capacity of 100,000 cars in Poland. Samsung SDI has also secured the facilities that can produce 50,000 cars a year through its Hungary plant from the second quarter this year. Japan’s Panasonic ranks second in the world in terms of shipments but it heavily depends on US-based Tesla Inc.
An official of a South Korean company says, “It hasn’t yet reached the stage that we should be worried,” but they have begun making every preparation by securing orders and expanding their facilities.”
An LG Chem official said, “The order backlog of the electric vehicle battery division amounted to 42 trillion won (US$37.43 billion) as of the end of last year. The sales of electric vehicle batteries are expected to reach 7 trillion won (US$6.24 billion) from 2020 when the third-generation electric vehicle will go into production in earnest. The battery production capacities of the four plants will also grow from the current 18 Gwh to 70 Gwh by 2020.”
An official from Samsung SDI said, “We have won orders for some of US$10 billion (11.22 trillion won) worth of batteries from Germany’s Volkswagen in February this year. Since we have already obtained next couple of years of orders from major clients in Europe, we are not worried about orders. When CATL enters the European market, it can be a ‘fight for the pie.’ But, we can’t jump to a conclusion.”
Market experts also believe that CATL has shown a steep growth in sales for a short period of time with the expansion of the Chinese market but it will take time to get recognition in Europe. Park Ki-ho, an analyst at Daishin Securities Co., said, “CATL has recently signed an agreement with BMW to supply battery cells worth 1 billion euros (US$1.17 billion or 1.32 trillion won) by 2021. However, LG Chem and Samsung SDI think that more orders are ongoing.”
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