As China and Germany are making extraordinary strides in the BEV and lithium-ion battery industries, experts are suggesting that domestic infrastructure expansion and policy support for targeting emerging markets should be strengthened.

The Federation of Korean Industries (FKI) announced on the 8th the changes in the landscape of the global battery electric vehicle (BEV) and lithium-ion (Li-ion) battery industry, which is growing at an average annual rate of over 20%, and the challenges facing Korea, based on the ITC Trade Map world trade statistics.

According to the ITC trade map, the global export market share of the world's top five battery electric vehicle exporters in 2021 increased by 9.5 percentage points for China and 3.8 percentage points for Germany compared to 2020, while Korea, Belgium, and the United States decreased by 0.8 percentage points, 2.1 percentage points, and 8.5 percentage points, respectively.

▲2021 Trends in global export market share of the world's top five BEV exporting countries. (Image source: Federation of Korean Industries)

China's share of the global battery electric vehicle export market rose by nearly 10% last year, thanks to a 513.9% year-on-year increase in exports to the EU, the world's largest import market, by Chinese companies such as Shanghai Automotive, BYD, and NIO, including Tesla's Shanghai factory.

As a result, China's share of the EU battery electric vehicle import market rose sharply by 11.7 percentage points, from 4.2% in 2020 to 15.9% in 2021.

▲EU BEV import market share by country. (Image source: Federation of Korean Industries)

Meanwhile, Korea's market share fell 1.8 percentage points from 9.2% in 2020 to 7.4% last year, while the United States' share plummeted from 22.3% in 2020 to 6.5%.

Looking at the changes in EU battery electric vehicle import amounts by country, △China increased by 513.9% from €790 million to €4.85 billion in 2020, △Germany increased by 84.6% from €2.67 billion to €4.93 billion, △Korea increased by 30.6% from €1.73 billion to €2.26 billion, while △the United States decreased by 53% from €4.19 billion to €1.97 billion.

China is also eyeing to dominate the global market for lithium-ion batteries used in electric vehicles, smartphones, and other devices.

The world export market share of the world's top five exporters of lithium-ion batteries in 2021 increased by 2.9 percentage points for China, 1.8 percentage points for Poland, 1.2 percentage points for Germany, and 0.3 percentage points for Hungary compared to 2020, while Korea decreased by 2.0 percentage points.

▲2021 Trends in global export market share of the world's top five lithium-ion battery exporting countries. (Image source: Federation of Korean Industries)

Looking at the export performance of the top five lithium-ion battery exporting countries last year, △China increased by 56.6% from 15.94 billion dollars in 2020 to 24.96 billion dollars last year △Poland increased by 69.6% from 4.6 billion dollars to 7.8 billion dollars △Germany increased by 68.7% from 3.45 billion dollars to 5.82 billion dollars △Korea increased by 18% from 4.88 billion dollars to 5.76 billion dollars △Hungary increased by 51.1% from 2.74 billion dollars to 4.14 billion dollars.

In particular, the global market share of electric vehicle batteries, including lithium-ion batteries from Chinese companies such as CATL, BYD, and CALB, increased by 10.3 percentage points from 38.4% in 2020 to 48.7% last year.

On the other hand, the market share of LG Energy Solution, Samsung SDI, and SK ON decreased by 4.3 percentage points from 34.7% in 2020 to 30.4% last year.

Japanese companies such as Panasonic also saw their market share drop by 6.2 percentage points, from 18.4% in 2020 to 12.2% last year.

However, as China's domestic demand is higher than its exports, Korea's share of the global electric vehicle battery market excluding the Chinese market increased by 4.6 percentage points from 52.4% in 2020 to 57% last year, maintaining its position as the world's No. 1.

Kim Bong-man, head of the International Headquarters of the Federation of Korean Industries, said, “China has established itself as the world’s leading battery electric vehicle powerhouse thanks to its abundant reserves of battery raw materials and the Chinese government’s policy financial support for domestic battery companies,” and emphasized, “The new government should strengthen cooperation between the United States, which has been rebuilding its battery supply chain since last year, and Korea-U.S. electric vehicle and battery cooperation.”

He continued, “In April 2022, a domestic company began construction on an electric vehicle battery plant in Indonesia to secure large-scale minerals such as nickel and produce battery cells, and in May, a joint venture for cathode materials was established in Korea with a Chinese battery cathode material company. “We are pursuing market dominance through cooperation with emerging countries such as Indonesia and China, including establishing a new market,” he said. “The new government should strengthen policy support for companies to target emerging markets while expanding domestic infrastructure.”