More and more South Korean battery production equipment makers are expanding into the battery material market.
As battery cell makers wrapping up their latest facility expansions, these companies are hoping to supply them with materials for new sales.
Such companies include Cowin Tech, Youil Energy Tech and CIS.
Cowin Tech acquired Top Material, a battery material company, back in March. Top had produced NCM cathodes.
Cowin Tech is increasing Top’s spending to develop the price-competitive lithium manganese nickel oxide (LMNO) cathode.
Youil Energy Tech made a strategic investment into Jae Young Tech in March. Jae Young Tech extracts lithium carbonate and NCM sulfate from dead batteries to supply to cathode companies.
Youil Energy Tech is hoping this material business could be its future growth engine.
CIS is currently developing electrolytes for use in solid-state batteries, after receiving the base technology need from Korea Electronics Technology Institute in April.
Cis had been part of a national project that started in 2017 to develop solid electrolytes.
These equipment makers are investing in battery materials as the raw material cost is a large part of electric vehicle prices.
Batteries account for up to 40% of the cost of an electric vehicle. Cathode and anode together account for half of the cost to make a battery.
It will be new companies to compete with existing cathode and anode companies but they can enter new areas such as recycling dead batteries, Mertiz Securities analyst Noh Woo-ho said.
A source from one of the battery equipment companies said battery kits are relatively low in sales compared to fab equipment.
Battery cell makers will attempt to foster only the key suppliers within the next two to three years, they said.
South Korean battery cell makers are also taking high interests in procuring raw materials for battery production.
LG Energy Solution had signed deals with Chinese and Australian mining companies to receive a steady supply of nickel and cobalt. SK Innovation has signed deals worth trillions of wons with EcoPro BM to procure cathode. Samsung SDI has a joint venture EcoPro BM called EcoPro EM to procure cathode.