– The battery market is growing rapidly due to the increase in global EV demand
– The Japanese automobile industry is also belatedly entering the EV route.
While the Japanese industry is facing great difficulties due to the recent global shortage of semiconductors, as the promotion of electric vehicle electrification is accelerating due to the recent global decarbonization movement, core parts of electric vehicles including electric vehicles (EVs) are emerging as new 'rice of the industry'. is becoming In Japan, the core industrial item that forms the basis of the national economy is called 'industrial rice', which means that it is an important resource, such as 'rice, an indispensable core food that is widely consumed and forms the basis of production'. In Japan during the period of high economic growth, 'industrial rice' refers to steel, but now it refers to semiconductors instead of steel.
Like semiconductors, core parts such as a battery, which is a vehicle's fuel (storage tank), or a motor, which is a power source, can be compared to rice in the second and third industries. Like the semiconductor supply shortage, batteries and motors may face a global supply crisis due to unexpected events such as Corona 2. In this paper, we would like to look at the recent trends of Japanese manufacturers, focusing on lithium-ion batteries for vehicles, which have recently grown significantly among electric vehicle parts.
<Semiconductor called 'the rice of industry' in Japan>
[Source: Hitachi Hi-Tech, Kiosia]
EV battery market in which Korean, Chinese, and Japanese makers are competing fiercely with the top three companies
Since the performance and quality of a battery is directly related to the cruising distance and safety of the vehicle being installed, the battery is one of the most important parts of automobile parts. As such, it accounts for a high proportion of the total vehicle cost. According to a Japanese automobile industry official, battery-related costs account for about half of the total cost of Japanese electric vehicle (EV) parts. China's CATL is currently taking the top share in the rapidly growing global automotive battery market, followed by Korea's LG Energy Solutions and Japan's Panasonic in second and third places, respectively. It forms a competitive landscape. Next, we will look at the current status of the three key markets for EV dissemination: China, Europe, and the US.
China, where domestic companies dominate the battery market
In China, an advanced EV country, domestic companies dominate the battery market. Among them, CATL, which has grown rapidly since its establishment in 2011, is expanding domestic production by forming alliances with world-leading automakers, including in North America and Europe and Japan. As a Japanese manufacturer, Honda agreed to a capital alliance with CATL (about 1% investment in CATL) and joint development of lithium-ion batteries for EVs. In addition to a comprehensive partnership with CATL in the battery sector for new energy vehicles (NEVs), Toyota is also conducting joint R&D with BYD. Nissan is receiving EV batteries for export from CATL, and has invested (20%) in Envision AESC.
Europe reborn as the world's battery factory through rapid EV conversion
Meanwhile, in Europe, as the EV conversion policy is actively pursued, demand for batteries is rapidly increasing, and the establishment and operation of EV battery factories is increasing. In 2020, a total of 136 EVs and PHVs (plug-in hybrid cars, the same as PHEVs) were registered as new vehicles, and Europe has been reborn as the world's largest EV market with a 8,167% share of the global EV market. In terms of transportation cost, the fact that local production of heavy batteries is efficient is also considered one of the reasons for the rapid increase in the number of new battery factories.
Battery production in Europe can be broadly classified into three types. The first is a case where a Chinese or Korean battery manufacturer establishes a new plant in Europe and produces it. In addition to Chinese companies such as CATL and SVOLT, LG Energy Solutions, SK Innovation, and Samsung SDI are also entering Europe. Korean manufacturers mainly have production bases in Central and Eastern Europe. The second is the case of production by a local European manufacturer. Sweden's emerging battery maker Northvolt is a representative company, and in the EV battery market dominated by Chinese and Korean manufacturers, it can be said to be a 'EU state-run company' supported by Germany's Volkswagen and BMW. The third is a case where a car maker is directly involved in battery production. Volkswagen of Germany announced that it would operate six battery factories in Europe by 3, and Tesla of the United States announced that it plans to produce up to 2030GWh of battery cells in parallel at an EV plant under construction near Berlin.
In the United States, new EV makers are emerging one after another under Tesla, the world's No. 1 EV maker.
The Biden administration, which values environmental protection, is also strongly promoting EV conversion as a policy. The Biden administration announced its goal of increasing the share of EVs (excluding hybrid cars) in new car sales in the US market to 2030% by 50. It also announced plans to allocate $1,740 billion in EV charging facilities and subsidies for converting gasoline vehicles to EV, citing the establishment of an EV battery supply chain as a key item. In the midst of these changes, the North American EV battery market is currently dominated by Chinese and Korean battery makers (GM and LG Energy Solutions, Ford and SK Innovation, etc.) affiliated with North American and European car makers, Panasonic affiliated with Tesla, and vertically integrated models. It can be summarized as a structure such as Toyota, which advocates a self-procurement method. The EV share of new car sales in the US is 2020% in 1 and 2021% in January-September 1. Compared to China and Europe, the US EV market is just growing, but global carmakers and battery makers Considering the possibility of expanding market demand, we are accelerating investments in the US market, such as establishing a new production base in the US.
<Partnership relationship with major vehicle battery manufacturers>
[Source: Newswich Daily Industry Newspaper]
Japanese automakers that are lagging behind are also starting a full-fledged EV route.
Major Japanese automakers, which have been pointed out as lagging behind European makers in EV conversion, have recently begun to show an aggressive attitude towards EV conversion. In January 2021, after former Japanese Prime Minister Yoshihide Suga advocated the goal of achieving 1% domestic new vehicle sales EV ratio by 2035 in a policy speech, Japanese automakers scrambled to revise and accelerate EV strategies. announced.
First of all, in April 2021, Honda announced a policy to convert all new cars sold worldwide to electric cars including EVs by 4, and also announced the withdrawal from the car racing F2040 series and the elimination of engine parts manufacturing plants. Nissan, which emerged as an EV leader by launching the battery electric vehicle 'Leaf' in 1, announced a plan to significantly expand the EV sector by 2010 and to increase the proportion of EVs to 2030% of all vehicle models sold. Toyota, which has achieved great success in the hybrid vehicle (HEV) segment with high fuel efficiency, has been cautious about converting to EVs, but eventually plans to nearly double the number of EVs sold worldwide by December 50 to its previous target by 2021. announced plans to raise the number to 2030 million units.
<EV strategy of Japanese automakers>
[Source: Listed in the table]
Although Japanese automakers are accelerating the transition to EVs, at this point, only Honda has expressed a policy of completely eliminating internal combustion locomotives. Toyota and Nissan have not yet given up options such as HEVs. Toyota CEO Akio Toyota, who also serves as the chairman of the Japan Automobile Industry Association, has consistently insisted that the development of EVs should be pursued in consideration of each country's energy environment, saying, "Our enemy is carbon, not internal combustion engines." In countries such as Japan, where the proportion of thermal power generation is high, even if all vehicles are converted to EVs and CO2 emission is suppressed while driving, the logic is that it does not lead to decarbonization because COXNUMX is emitted during power generation. (called LCA)). Major Japanese car makers are also generally supporting Toyota's claim. Japanese automakers are looking for technologies that can contribute to decarbonization by applying the engines of existing internal combustion engine vehicles, such as hydrogen engines and biomass fuels, while actively investing in the EV market, where many emerging makers are entering. situation to be
[Source: NIKKEI Newspaper, Nidec, Daily Auto Newspaper, Carview]
implication
The negative ripple effect on the manufacturing industry continues, such as the suspension of operation of automobile manufacturing plants or continued production cuts due to the lack of semiconductors. This is not just a story limited to semiconductors. Considering that EV conversion will proceed rapidly in the future, batteries, like semiconductors, may face a supply-demand crisis due to unexpected events. Among them, the establishment of a stable supply system for EV batteries, whose demand is rapidly increasing worldwide, and the establishment of partnerships between automakers and battery makers to develop new products is accelerating. Although Korean companies have excellent competitiveness in the global automobile and battery industries, competition for leadership in the global EV market is expected to intensify due to the entry of large companies in other industries and the emergence of new EV makers.
Meanwhile, considering the international situation in which supply chain risks are expanding due to the recent Corona 19 and Ukraine crisis, it is necessary to pay special attention to the 3R (Reduce, Reuse, Recycle) factors of EV batteries. Rare metals (rare metals), a raw material for batteries, are concentrated in specific regions such as Russia, China, and Africa, so there are always risks such as supply instability and price fluctuations. Development of EV batteries that do not require rare metal (Reduce), reuse as a stationary battery after EV use (Reuse), and recovery of rare metal from EV batteries (Recycle) not only lead to the aforementioned risk reduction, but also dramatically increase the demand for EVs. It is an urgent task that needs to be addressed preemptively from now on before it is done.
Earlier in this paper, it was mentioned that 'Japanese automakers should seek technologies that can contribute to decarbonization by applying the engines of existing internal combustion locomotives such as hydrogen engines and biomass fuels'. From a mid- to long-term point of view, there is no doubt that EVs will replace internal combustion locomotives in the future, but there is no law that another innovative technology that surpasses EVs will not appear. EV batteries are disadvantageous for use in cold regions because charging and discharging efficiency is lower in low-temperature regions. As there are countries and regions in which EVs are not the best option due to severe weather and geographic conditions such as high temperature, high humidity, dust, and seawater (salinity), the above-mentioned new decarbonization technologies such as hydrogen engines and biomass fuels continue to You need to pay attention.
Source: Comprehensive data from Imperial Data Bank, Hitachi Hi-Tech, Kiosia, Nippon Computer, Carview, Ilgan Kogyo Shimbun, NIKKEI Shimbun, NIKKEIX-TECH, etc. and data from KOTRA Tokyo Trade Center