The European electric vehicle (EV) battery market is undergoing a significant transformation, with Chinese companies rapidly gaining ground while Korean battery companies face declining market share. According to market research firm SNE Research, Chinese battery cell manufacturers’ share of the European market will jump from 15 percent in 2020 to an impressive 39 percent in the first half of 2021. In contrast, Korean companies saw their share drop from 68 percent to 58 percent over the same period.
Despite this power shift, demand for EVs in Europe remains strong. In August alone, sales of battery electric vehicles (BEVs) reached new heights, with 194,000 units sold – a remarkable 103.2 percent increase over the previous year. Although sales of plug-in hybrid electric vehicles (PHEVs) were down 15.7 percent year-over-year, the market for BEVs continues to thrive due to the significant battery cell capacity they offer.
One of the main reasons for the decline of Korean companies in the European battery market is the increasing market share of Chinese automakers such as Geely and Shanghai Automotive Industry Corporation (SAIC). These automakers have adopted CATL’s ternary cobalt carbon monoxide (NCM) battery cells, pushing Chinese manufacturers to the forefront. In addition, European automakers are favoring the adoption of LFP batteries, which have traditionally been dominated by Chinese manufacturers. LFP batteries have gained popularity due to their lower cost compared to NCM batteries, which are mainly produced by Korean companies.
To regain their lost market share in Europe, Korean battery companies need to prioritize strong price competitiveness and actively respond to the growing demand for LFP batteries. Only by effectively competing with their Chinese rivals on price can Korean companies hope to reverse the current trend. Significantly, LG Energy Solution recently announced plans to mass-produce LFP batteries for electric vehicles starting in 2026. Samsung SDI and SK are also considering volume production of LFP batteries, indicating a collective industry response to the changing dynamics.
As Chinese companies continue to dominate the European EV battery market, Korean battery manufacturers are strategizing and taking steps to regain their foothold. This fierce competition between the two powerhouses promises to shape the future of the industry, ultimately driving innovation and affordability for electric vehicles.
