Lack of Samsung SDI and LG Chem Battery Certification In China Results In First Victim

JUL 12 2016 BY MARK KANE 40

Samsung SDI lithium-ion batteries

Samsung SDI lithium-ion batteries

Samsung SDI and LG Chem are both having serious troubles in China; this after both Korean lithium-ion battery manufacturers have built new plants and began production for the plug-in automotive market.

The Chinese government denied battery certification for Samsung SDI and LG Chem a few months ago, which meant at the time that electric cars equipped with batteries produced by both companies will not qualify for generous subsidies.

The government has decided to mostly only approve those battery makers manufacturing LFP-type cells (which perhaps not surprisingly are mostly found in China), over other battery chemistries featuring higher denisties.

Carmakers that have developed and are producing EVs with Samsung SDI and LG Chem as a result be seriously affected. The battery maker had expected (hoped) to have the situation sorted out before any such reality would come to fruition.

However, that was not the case apparently, as the first victim seems to be Jianghuai Auto’s iEV6s, an all-electric SUV with Samsung SDI batteries, that has fallen out of production due low sales, not able to compete with other plug-in products. Only 1,858 were sold from March to May, instead of at the targeted production rate of 1,000 to 2,000.

There is no easy way to replace high-performance batteries by domestic cells (often with lower energy density) so some clients will be pretty despaired with the investment.

“Anhui Jianghuai Automobile Co. has stopped producing an electric SUV equipped with Samsung SDI Co. batteries on concern it may be stuck with unsold stock if the model is disqualified from government subsidies because the South Korean supplier isn’t on a list of approved vendors.

The Chinese carmaker will resume manufacturing the iEV6s sport utility vehicle, its most expensive electric model at 234,800 yuan ($35,000) before subsidies, only after Samsung SDI makes it to the government’s approved list, according to Wang Fanglong, a Jianghuai Auto executive in charge of new-energy vehicle research and development.”

Whether Samsung SDI and LG Chem eventually break into the Chinese government’s approved list of suppliers in order to qualify for subsidies remains main question. Currently, there are a substantial number or vehicle manufacturers that signed with Samsung SDI and LG Chem.

Source: Bloomberg

Categories: China

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40 Comments on "Lack of Samsung SDI and LG Chem Battery Certification In China Results In First Victim"

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How can anyone do business in this country? The govt. just decides to change the rules and negates billions of dollars of investment. Imagine if Nevada just decided to revoke Tesla’s tax breaks.

This is protectionism at its worst but this sort of change to the law causing companies to loose billions of investment dollars is, unfortunately, not restricted to China.

More likely corruption (still) at high levels – – ?

“Imagine if Nevada just decided to revoke Tesla’s tax breaks.” Or if Nevada would decide to lower solar netmetering rates… uhm… wait…

Sounds like a Buffet lunch.

Well, California did just forget to renew its EV tax credit in June.

Boy I sure hope that gets rectified in the new budget, and quick.

Kinda like Nevada holding up the promised improvements in North Vegas infascture which keeps Fariday Futures from building…
Which may be justified vut Nevada shold have done due diligance before commiting…

….and here we thought the US Gobberment was corrupt.

Oh, it is.

We’re just generally more subtle about it…

Trollnonymous…The US Goobernment is not far behind …A few more Obama Shinanigance & they will surpass the Chinese in Corruption.

And Obamas ecomic warfare on VW after letting GM and Toyota get away with a minor slap on the wrist when there products where directly killing people and was covered up??

Where are the heads of the EPA who stole billions of dollars of tax payer money and and are guilty of derliction of duty and complete incompetence letting VW get away with false emissions for 10 years…

Let alone every other desiel producer in the US and EU who are cheating in slightly more legal ways with their foul poluting products…

What? So far, the sole manufacturer caught with defeat software has been VW.

What you call “economic warfare” is simply upholding existing law, which VW has been aware of the whole time. Are you proposing that the law be ignored?

If this stunt turned out to be cheap for VW, it would encourage other automakers to do the same thing in the future. It needs to be costly for them. It specifically needs to cost more money than they saved by doing it.

There is a certain subset of Americans who tout the “Rule of Law” aspect of the US, *except* when it infringes on corporate profits and/or cheating, and especially if they have a vested interest in the corporation so affected.

And we actually trade with this country, mostly they send stuff to us with very little tear off while we send things to them very high tariffs

Lol. Tear off = Tarriff. Good one.

Don’t forget that we willingly do it. It’s what gives us cheaper goods and higher corporate profits, don’t you know.

Buy domestic if and when you can… starting with fuel for your vehicle, of course.

If Samsung/LG batteries are indeed superior, they will find the way to more expensive cars and for exports. This might end up being good news for non-China car makers. With latest missile defense deployment thanks to North Korea, I doubt Chinese will be too eager to help Korean companies.

Thinking this may be good for the rest of us. Glut of good batteries on the market, may mean lower prices available.

Will force companies to sell their expensive factories to China for pennies on the dollar? Then they suddenly have an about face on the battery tech?

Very… clever.

Don’t forget a few well placed cameras to acquire the knowledge to manufacture these cutting edge batteries.

Yep, and don’t even need cameras, just some well-placed factory “workers” as has been done everywhere else – – ?

That would be a good case for S. Korea to take to the WTO court.

Does this mean that Tesla’s factory in China won’t get “local incentives” also? When Tesla does build the factory there…

Their cars will also not qualify for any incentives.

Good thing they haven’t purchased or broken ground yet.


The conventional wisdom was that Tesla’s second auto assembly plant was to be in China. But if China keeps pulling this kind of B.S. — and there does seem to be a pattern here — then I think Tesla would be well advised to look elsewhere in Asia; perhaps S. Korea or Taiwan.

“The government has decided to mostly only approve those battery makers manufacturing LFP-type cells”
This statement is wrong, there are NCM producers on the list.

Could you tell me where I can find the information about which companies were accepted for the Chinese government subsidies? Thanks in advance!

China can suck it.

lol +1

Try living your life (buying most manufactured products) without buying anything made in China or with Chinese subparts, I dare you. We hate it, but we hate higher prices that would result from keeping jobs local even more. So go figure.

The “investment community” also likes things being made in China, as the guarantees higher corporate profits. Good luck changing, let alone reversing, that 20+ year trend.

Like it or not, this effects jobs in Michigan designing cars for the Chinese market. Total BS.

I was really hoping that this arbitrary imposition of a protectionist regulation in China was just a temporary thing; that battery makers would be able to negotiate and end to it. Looks like that’s not going to happen.

I really can’t understand why so many companies are so eager to do business in China, when they keep pulling B.S. like this.

OTOH, China is now GM’s #1 market. Maybe it’s a matter of knowing who to bribe, and how much. Perhaps GM has mastered the art of that, and LG Chem has not.

I keep trying to peer thru the “bamboo curtain”, but it’s rather opaque to me.

Its just as opaque to product designers in HK, Taiwan and the like who look to manufacture in China because of the perceived lower costs, but that is rapidly changing which is probably why China is making it more “difficult” – – ? But they are “shooting themselves in their feet” – again.

After about six years of having a branch office in China, my company pulled out (alas, to use contractors in India). (We make navigation software). There were several excellent engineers there that I got to know well. However, there was always some level of “shenanigans” by the managers. I never knew how much was proven, how much was reasonable rumor, and how much was pure speculation. It’s unfortunate, because I was forced to give up some good experienced engineers for some green ones. It’s given me a level of appreciation for how important trust is in business.

I avoid buying crap from China at all costs. Protectionism is only one reason, shipping jobs and pollution to China is anotger. I’m successful boycotting chinese goods 95% of the time. I don’t mind going to multiple stores to find clothes, curtains, tools etc tgat are not from China.

It’s not easy but it’s the right thing to do. Join me in buying products from the US and other countries beside China, it’s doable.

Good for you. I’m curious what price premium you find yourself paying. Most Americans like to b_tch about this kind of thing until it means paying 10% more (or even less) for their product of choice, especially clothes. Also, many products simply are not made anywhere else. What to do then?

If I wanted to buy an EV that has no subsidies due to that lack of certification, but the EV is of better quality than those with subsidies, I will buy the first EV, not the second. If anyone wants a great EV they will not be troubled to pay more for it.

Slowest, weakest comment system on the internet! (Sorry, if this gets moderated out, perhaps the moderator will pass along all of our frustrations.)

The servers were made in China.

…. and China can still suck it.

Didn’t the US Gov’t ban Huawei from winning any Gov’t telecom contracts?

Didn’t the US Gov’t back Apple’s highly contentious patent war against Samsung, which resulted in a $1B judgment, and sales restrictions, etc.?

Didn’t the US Gov’t block the private, Chinese backed, high speed rail project from LA to Las Vegas?

Is the US Gov’t/Nevada State blocking the Chinese backed, Faraday Future EV startup to protect Tesla?

Arguably, the protectionism, national security charge anti-free trade charge can be made against both China, and the US.