China to review safety of Samsung, LG batteries

[THE INVESTOR] The Chinese government has recently decided to review the safety of nickel-manganese-cobalt-oxide batteries, or NMC, that are produced by leading battery-makers like Samsung SDI and LG Chem.

Industry watchers say it is highly likely that the decision is politically motivated to offer benefits to China’s less experienced battery-makers that are still focusing on lithium-ion-phosphate batteries, or LFP.

The NCM manufacturing improves battery life and performance but requires more advanced packing and management systems. Most Chinese firms make LFP batteries for safety reasons. 

“The measure is intended the Chinese battery-makers more time to nurture related technologies,” an industry source was quoted as saying by a local news outlet. “The problem is that nobody knows exactly when the result will come out after Samsung and LG have already spent millions of dollars in building EV battery plants in China last year.”

Currently, NCM batteries dominate 93 percent of the total EV battery market as they are adopted by global carmakers.

Early this year, the Chinese government announced it would not offer subsidies for electric buses using NCM batteries citing the same safety concerns.

In China, EV buses make up almost 40 percent of the EV market. And the government offers up to 80 percent of the car prices as subsidies.

Samsung and LG, which completed EV battery plants in China last year, are making all-out efforts to make it to the final list of companies subject to the Chinese government’s EV subsides from 2018. The two companies have failed to be included into the list over the past three evaluation sessions, with two more sessions remaining.

By Lee Ji-yoon (jylee@heraldcorp.com)