Hyundai Motor’s dedicated battery electric vehicle platform, E-GMP (Courtesy of Wikipedia)
Hyundai Motor Co. is preparing to build its first electric vehicle battery plant by around 2027, taking its first step forward to internalize battery technology as part of its effort to improve EV performance and cost competitiveness, according to people with knowledge of the matter on Tuesday.
The battery plant will be located in Anseong, Gyeonggi Province, with a capacity of 1 GWh-2 GWh batteries. One gigawatts hours (GWh) corresponds to batteries enough to power 13,000 EVs.
The largest carmaker in South Korea has been in talks with cathode materials suppliers such as L&F Co., POSCO Future M Co. and Chinese materials companies since the first half of this year to directly purchase the battery ingredients, the sources told The Korea Economic Daily.
They are now negotiating over the volume and price of cathode supply, which will be shipped from around 2027, they added.
The proposed production capacity suggests Hyundai is preparing to mass-produce EV batteries, albeit a small volume. It is highly likely to churn out pouch-type nickel-cobalt-manganese (NCM) batteries at the plant, said the sources.
At the annual CEO investor day forum in August, Hyundai said it is working on internalizing EV battery technology, including for all-solid-state batteries and plans to develop low-nickel batteries by 2030.
Industry observers said, however, the all-solid-state and low-nickel batteries will likely materialize after 2030 for Hyundai.
Hyundai’s electric sedan IONIQ 6
EVs under the brands of Hyundai, its sibling Kia Corp. and Hyundai’s premium sub-brand Genesis are equipped with pouch-type NCM, or nickel-cobalt-manganese-aluminum (NCMA) batteries, supplied by SK On Co. and LG Energy Solution Ltd.
The electric models of their budget cars such as Kona, Niro and Ray use CATL’s lithium iron phosphate (LFP) batteries.
A battery industry official said that Hyundai will focus on sharpening its technology to reduce EVs’ fire risk and improve their performance, rather than ramping up battery production.
Its battery production will also facilitate its advance into the battery recycling market.
PRODUCTION UNDER OEM CONTRACTS
Even after the completion of its battery factory, the carmaker will continue to outsource a large quantity of batteries it needs to battery cell makers such as SK On, according to the sources.
Some of them will be designed by Hyundai and produced under original equipment manufacturing contracts by battery cell companies.
Genesis Electrified GV70
Hyundai is not alone in pursuing battery technology internalization. Batteries account for 40% EV manufacturing costs and determines the performance of the vehicles such as mileage.
Tesla is mass-producing 46-pi cylindrical batteries that fit into its EVs. Battery cell makers have not yet produced the so-called next-generation batteries.
BYD has equipped almost all its EVs with its own batteries featuring cell-to-pack and cell-to-chassis technologies. The Chinese carmaker has shipped over 100,000 EVs outside China in the first half of this year despite the global move to curb China’s rise in the high-tech industry.
Japanese carmakers such as Toyota and Nissan have announced massive investment plans for battery production, supported by Japanese government’s subsidies and loosened regulations.
Volkswagen is building battery production lines in Europe and Canada. They are expected to produce as much as 240 GWh in Europe and 90GWh in Canada annually by 2030.
General Motors Co. plans to set up a battery-dedicated plant for mass production. China’s Geely Automobile has been rolling out a small volume of batteries. Other Chinese carmakers are preparing to follow suit.
Hyundai’s battery technology internalization will bode ill for battery cell makers, particularly for SK On that derives about half of its sales from Hyundai and Kia under Hyundai Motor Group.
Meanwhile, Hyundai has recently slashed its 2030 vehicle sales targets by 6% to brace for a protracted EV uptake slowdown.
By Sang Hoon Sung, Kyung-Kyu Kim and Woo-Sub Kim
uphoon@hankyung.com
Yeonhee Kim edited this article
