Skip to content
  • KOSPI 3254.42 +4.21 +0.13%
  • KOSDAQ 1055.50 +5.25 +0.50%
  • KOSPI200 431.55 +0.17 +0.04%
  • USD/KRW 1151 0.40 0.03%
  • JPY100/KRW 1,044.99 1.69 0.16%
  • EUR/KRW 1,355.13 -1.60 -0.12%
  • CNH/KRW 177.89 0.30 0.17%
View Market Snapshot

EV batteries

Korean battery shares tumble as VW gears up for in-house production

By Mar 16, 2021 (Gmt+09:00)

Volkswagen ID.4 electric SUV
Volkswagen ID.4 electric SUV

Shares of South Koreas’ major battery makers tumbled on Tuesday after Volkswagen AG announced it will gradually switch the type of batteries used in its electric vehicles away from those made by Korean suppliers and make its batteries in-house.

LG Chem Ltd., the parent of Korea’s top EV battery maker LG Energy Solution Ltd., saw its shares plummet 7.8%, the biggest daily loss this year, to finish at 891,000 won in Seoul. The stock had fallen as much as 8.4% earlier in the day.

Shares of SK Innovation Co. tumbled 5.7% to 215,000 won.

Volkswagen, one of the world’s top automakers, said at its Power Day event on Monday that it will roll out a new unified prismatic battery cell design from 2023 to reduce production costs and improve efficiency.

The unified type can be manufactured at 30-50% lower costs, compared to existing pouch-type batteries, it said.

Under its EV roadmap, the German carmaker also plans to build six "gigafactories" in Europe by 2030 with a total production capacity of 240 gigawatt hours (GWh) per year. That's enough to power almost 4 million Volkswagen ID.3 electric vehicles.

With the construction of new battery plants, Volkswagen aims to power up to 80% of its electric cars by 2035 in-house, reducing its dependence on outside suppliers.

The first step is a restructuring of its partnership with Northvolt AB, the Swedish battery startup in which Volkswagen took a 20% stake in 2019. Volkswagen said it will increase its stake in Northvolt and order an additional $14 billion of batteries from the company through 2030.

Separately, Volkswagen intends to operate about 18,000 high-speed public charging points in Europe by 2025, up from about 3,600 at present, as it seeks to gain an edge in the electric car race. It is also expanding charging points in the US and China.

Volkswagen announces its 2030 roadmap for batteries and charging technology.
Volkswagen announces its 2030 roadmap for batteries and charging technology.


Volkswagen’s announcement came as a shock to LG Energy and SK Innovation, which have been manufacturing pouch-type batteries for the German automaker.

Among Korean suppliers, Samsung SDI Co. supplies prismatic batteries to Volkswagen.

Shares of Samsung SDI edged down 0.9% to close at 680,000 won on Tuesday.

“Volkswagen’s move is negative for not just LG and SK but the entire Korean battery industry because other automakers will follow suit and try to make batteries for themselves,” said Koh Tae-bong, head of research at Korea’s HI Investment & Securities.

In September of 2020, Tesla Chief Executive Elon Musk announced that the company plans to develop new cells in-house.

Volkswagen’s planned output capacity expansion to 240 GWh a year is twice LG Energy’s capacity in 2020.

Before significantly raising the portion of internally produced batteries, Volkswagen is widely expected to turn to China’s Contemporary Amperex Technology Co. Ltd. (CATL) and BYD Co., which make prismatic batteries.

LG Energy's pouch-type battery
LG Energy's pouch-type battery


Some EV makers have preferred to use pouch cells because they offer a simple, flexible and lightweight solution to battery design. Such a type is easily stackable and thus makes the most efficient use of space and achieves a higher percentage of packaging efficiency. But pouch-type batteries are relatively easier to explode and catch fire.

Prismatic batteries are generally considered to have lower energy density than the pouch type, thus relatively safer. Such batteries are heavier but more endurable as they are packaged in welded aluminum housings.

Cylindrical cells are one of the most widely used packing styles for primary and secondary batteries and the advantages are ease of manufacture and good mechanical stability.

The 4680 battery cells Tesla is currently developing is the cylindrical type.

Among three types of batteries, prismatic batteries accounted for 49.2% of the global EV battery market in 2020, followed by the pouch with a share of 27.8% and cylindrical at 23%, according to industry tracker SNE Research.

Korean battery shares tumble as VW gears up for in-house production


The German automaker's plan comes at a time when LG Energy and SK Innovation are locked in a legal battle in the US over allegations of misappropriation of trade secrets related to EV battery technology.

Last month, the US International Trade Commission sided with LG in the case and issued a 10-year import ban on SK Innovation, while giving temporary permits to batteries and components needed to make products for Ford and Volkswagen in the US in order to allow them to find new partners.

On Tuesday, the two companies continued to exchange barbs, with SK saying LG’s announcement last week to expand its battery facilities in the US is partly aimed at dealing another heavy blow to it.

Write to Yun-Sang Ko, Jae-Kwang Ahn and Man-Su Choe at

In-Soo Nam edited this article.

Comment 0