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Green light turned on for S. Korean electric car batteries in China

Green light turned on for S. Korean electric car batteries in China

Posted May. 24, 2018 07:21,   

Updated May. 24, 2018 07:21


Three South Korean companies – LG Chem, Samsung SDI and SK Innovation – have been whitelisted in China as “good certified companies,” attracting attention to whether Beijing will lift its ban on South Korean batteries that has continued since the bilateral dispute over the deployment of U.S.-made Terminal High Altitude Area Defense (THAAD) anti-missile system in South Korea.

According to South Korea’s battery industry Wednesday, the China Association of Automobile Manufactures disclosed a preliminary whitelisted companies manufacturing automobile batteries. The three South Korean companies were included in the list, along with Chinese manufacturers including BYD, Guoxuan High-Tech and Lishen. A final list will be announced in late May after a period for filing objections.

The South Korean battery makers view the white-listing as a good opportunity to restore their sales in China. The Chinese government has suspended subsidies to electric vehicles (EVs) mounted with South Korean batteries since January last year as part of its retaliation against Seoul for the THAAD deployment.

As Chinese EV manufacturers used Chinese or Japanese-made batteries to win government subsidies, which account for nearly half of vehicle prices, South Korean makers have had difficult times. The operating rates of plants run in China by LG Chem and Samsung SDI once fell to nearly 10 percent. SK Innovation’s EV battery joint venture, Beijing BESK Technology, has stopped operation.

“Though we cannot rush to a conclusion yet because the whitelist is not linked with the list of EV makers eligible for subsidies, we view it as a positive sign that the discrimination against South Korean-made batteries will be removed,” an industry official said.

Dong-Jin Shin shine@donga.com