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LG Chem is faced with rising risks

Posted October. 12, 2020 07:47,   

Updated October. 12, 2020 07:47


LG Chem’s reputation as a number one global battery provider is at risk as the Ministry of Land, Infrastructure and Transport’s investigation suggests that Hyundai Kona EV fires could have been caused by “internal short circuits inside batteries due to defective battery cells”. Chinese newspapers are portraying a negative image of the South Korean chemical company, which was overtaken in August by its Chinese rival, CATL, in market share.

Since the beginning of October, when the fire incidents came to the surface, until Sunday, Chinese newspapers including the state media CCTV and Xinhua News Agency have reported rising concerns about the safety of electric vehicles in South Korea, pointing out that 80 percent of the Kona EV fires are linked to batteries, and that Kona EVs in China are not equipped with LG Chem batteries. Hyundai Motor Company said the Chinese model has CATL batteries, and no Kona EV fire has been reported in China.

Chinese batteries, however, are not completely fire-safe. Chinese car manufacturer GAC Group’s “Aion S” which is equipped with “NCM811” battery by CATL has caught fire three times in May and August, sparking concerns of the safety of batteries made in China. LG Chem is now facing the same controversy after 13 fires involving Kona EV that has its batteries have been reported across the world.

Meanwhile, CATL has replaced LG Chem to have the largest share (26.1 percent) of the world’s electric vehicle battery market in six months in terms of EV battery usage. CATL recorded 2.8GWh while LG Chem recorded 2.4GWh.

“Not only do fires caused by battery failure take a long time to identify causes, automakers can replace batteries that carry a risk with those from another battery maker,” said a source from a battery producer said. “This might work against South Korean battery producers, especially as their Chinese competitors are focusing on securing new customers in Europe.

Do-Young Kwak now@donga.com