LG Chem To Overtake Panasonic?

Tesla

AUG 27 2015 BY MARK KANE 43

LG Chem is hard at work

LG Chem

According to Lux Research, Panasonic is so far the sole market leader for lithium-ion batteries for EVs with market share of 39%.

Panasonic (which a few years ago acquired Sanyo) has several deals with manufacturers of hybrid and electric vehicles, but the ultimate customer is Tesla Motors.

50,000 Model S at an average of let’s say 80 kWh battery packs is 4 GWh of batteries annually. No one uses more and Tesla, besides increasing car sales, entered the energy storage systems market with Panasonic cells too.

Panasonic doesn’t have a guarantee that it will always be the leader and relying on just one large customer makes the Japanese company vulnerable.

Lux Research notes that LG Chem, Samsung SDI or others are willing and perhaps able to take on Panasonic’s share on market, which is growing towards $30 billion by 2020.

If Tesla survives, it will be hard to take Panasonic’s position in near future, although a large missing part is Nissan. If Nissan does switch to LG Chem (they already supplying Renault), then Panasonic’s advantage will melt.

“…LG Chem has already signed up large automakers including General Motors, Volkswagen, Daimler, and Ford. In the event of a surge in sales of plug-in hybrids (PHEVs) by the German manufacturers, LG Chem would only need to win over Japan’s Nissan to topple Panasonic.”

Panasonic Leads in EV Batteries With 39% Market Share, But Others Aim for Its Crown

Panasonic Leads in EV Batteries With 39% Market Share, But Others Aim for Its Crown

Cosmin Laslau, Lux Research Senior Analyst and lead author of the report titled said:

“The battery world’s big three – Panasonic, LG Chem, and Samsung SDI – are engaged in an all-out war for market share in the emerging plug-in vehicle opportunity, yet their strategies differ wildly. Watch the Throne: How LG Chem and Others Can Take Panasonic’s EV Battery Crown by 2020.”

Few findings:

  • Plug-in market is still in its infancy. Even Tesla, the poster-child of the EV revolution, holds less than a 0.1% share of global automotive sales. However, most auto majors are quickly offering more options: The Volkswagen Group, which sold 9.6 million units worldwide in 2014, plans 20 plug-in options by 2020.
  • Renault-Nissan Alliance is a wildcard. Renault-Nissan will account for 9% of this market in 2020. However, AESC, its joint venture that sources batteries from NEC, has underperformed, hobbled by high costs and lagging technology, leaving an opening for LG Chem (which already supplies Renault) to win over Nissan.
  • Next-generation technology is key to leadership. New technology beyond the current Li-ion batteries is key to the lower cost and higher performance need for future leadership. Already, Samsung Ventures has invested in solid-state battery developer Seeo and in graphene-silicon anode maker XG Sciences. Similarly, Volkswagen has backed Quantumscape and GM Ventures has invested in Sakti3, Envia Systems, and SolidEnergy Systems.

Source: Lux Research

Categories: Battery Tech, General

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43 Comments on "LG Chem To Overtake Panasonic?"

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Tech01x
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Tech01x

Lux has been pretty far off the mark so far, why would we expect them to be any better now?

Why would we expect that the major automakers will be able to put out competitive BEVs? They have shown zero signs of actually doing it – just vapor announcements, some outlandish and not-shippable concept art and few concept cars with virtually no technical details. Even the Bolt, which is due to arrive soon has a paucity of announced technical information, not even hints at battery capacity, horsepower, weight, or fast charge capabilities. That’s very curious for a vehicle due to start mass manufacturing in about a year. It’s very different from the Volt concept announced many years ago.

We do know that the cells that LG is putting into the next generation of BEVs sometime in 2016/2017 for various manufacturers to compete against the Model 3 is going to be inferior in specific energy and cost as compared to the existing cells that Tesla already puts into their shipping products.

mr. M
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mr. M

Why would germany/european carmaker turn eco? Because if the European carmakers can’t reach 90g CO2 emissions in average, by 2020-2022 they have to pay huge fees to the EU. Norway EV sales are at the Moment around 20% market share and finally they reach 90 gCO2.

Expect Daimler/VW/Audi/Porsche/BMW to have at least 20% of their euro sales in 2022 equiped with a 7-20kWh battery.

This are 600.000 PHEV per year only in germany!

Speculawyer
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Speculawyer

“Why would germany/european carmaker turn eco?”

Really? You have to ask that? Well . .

1) The Europeans take climate change seriously and they are finally realizing that they need to electrify to reduce greenhouse gases from transport.

2) Tesla is eating the lunch of the high-end German auto makers. Tesla is stealing sales from Mercedes, BMW, and Audi. They are not happy with that and they now all of plug-in car programs.

3) Who is Europe dependent on for lots of the oil & gas they burn? Vladimir Putin and the Russian bear. Would YOU want to have to depend on Putin?

It’s taken the Europeans longer than I thought it would but they have finally realized that they need to electrify their transport fleet.

mr. M
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mr. M

1) depends, as i poinzed out, according to rrgulations 20% low AERPHEV would be enough.

2) true

3) no. You can also import oil from middle East, which seems to be most of, since there is a trade ban with russia now.

General i would say that carmaker look after money most, not the environment… If it saves money/ increases sales they will go eco, as they are doing/starting now.

Mikael
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Mikael

There are very few trade bans with russia. And there is definitely no trade ban on oil (or gas) from Russia.
That will not happen either since a large part of oil (and gas) in Europe comes from Russia and a large portion of the Russian income comes from those sales.
It would be an extreme lose-lose situation to put in a ban like that.

TomArt
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TomArt

I was surprised, for a while, that Europe has been as slow as it has been, as well. However, one factor I have noticed is that, along with our pop culture, we have been exporting our politics, particularly the worst aspects of our “conservative” politics. The rhetoric out of Europe, particularly the UK and Germany, has had a distinct tinge toward “screw you, I’m in it for myself.” That’s not the kind of thinking that led to the creation of the EU and the Euro. I have particularly noticed this shift with the growing immigration/racial issues and the ongoing debt crisis with Greece.

Stimpacker
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Stimpacker

It’s not really Lux being off the mark, they do have other decent researchers. It’s Cosmin LasLau that constantly publishes nonsense.

This is supposed to be an investment research report. So what is the summary here? Don’t invest in Panasonic in spite of everything they have accomplished to date because they only have 1 customer? What’s to stop LG Chem’s customers from using Panasonic as a second source? All high volume manufacturers perform Assurance of Supply activities. He should look at the company’s upside and downside potential.

Chris O
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Chris O

Of course Lux is far of the mark. If you want to know what’s really going on you need to buy their pricey report.

The freebies are just to keep the intended customers happy.

JR
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JR

I hope not, we need More company’s with more innovation. A few big company’s joining each other just creates monopoles and drives prices up!

Alaa
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Alaa

Super capacitors are coming.

We have just a few weeks and we will see if that man will change the world!

Someone out there
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Someone out there

No they are not. Supercapacitors are very good compared to regular capacitors but they are nowhere near the capability of proper batteries. Supercaps can be a good complement to batteries for certain applications such as regenerative braking but they will not replace batteries.

Sublime
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Sublime

So the inventor of what would be one of the most profitable inventions of all time, doesn’t try to sell it to Panasonic, LG, GE, etc… Instead he posts it on youtube and claims the invention is owned by a penny stock company listed on a dubious stock exchange.

Seems totally legit to me.

Alaa
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Alaa

In spite of what I said I think that be it batteries or capacitors we need many GIGA factories be them LG Panasonic etc it really doesn’t matter. These storage devices need to be done by some one some where to change the percentage of electric cars from the current percentage (<1%) to a level that will make the electric car rapidly spreads all over the world. I think that it will be around 5%. Once we reach that level then electric cars will increase in volume much faster than they currently do. So all in all I wish all these companies including Edison, the best of luck.

David Murray
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David Murray

I’m still very curious to see if the upcoming Leaf has an LG-Chem battery pack or not.

Robb Stark
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Robb Stark

“IF” Tesla is to survive?

That is virtually guaranteed.

There is some small amount of reasonable doubt that Tesla will survive as an independent company.

Is there any doubt that if some Black Swan event happened which left Tesla unable to pay its obligations and raise new capital that Apple or Google would swoop in and buy Tesla at a discount?

Tesla is much more likely to survive than Fiat Chrysler,Mazda, Subaru or Mitsubishi.

Someone out there
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Someone out there

It is not at all guaranteed. Tesla’s capital is running out although they will probably be able to get some more. However, if the X turns out to have some serious design flaw and Tesla was forced to recall them that would surely be the end of it. Tesla is very much vulnerable at this point.

peet365
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peet365

you missed Robb´s point. If Model X will have problems someone else like Google and Apple will be happy to buy Tesla, its technology, market and brand at discount.

Kaiser
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Kaiser

True, but the new owner may not let Tesla operate at such steep losses, which is the end of Tesla as we know know it. Tesla mode of operation is “produce the best cars by losing the most money” and most other businesses do not share that philosophy.

Pushmi-Pullyu
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Pushmi-Pullyu

Ummmm… no. The reason Tesla’s expenditures significantly exceed its income isn’t because the company can’t sell cars at a profit. It’s because it’s investing in growing the company a lot faster than just re-investing all its profits.

If Tesla is bought out by a larger auto maker (or Apple), the brand may well be continued, just as brands like Porsche, Ferrari, and MG have been continued after being bought out by larger auto makers. But it’s very doubtful that Tesla would remain a company that’s growing as fast as it possibly can, or that it would continue devote its efforts to progressively making each new generation of its cars less expensive than the last. It’s most likely that any company which bought out Tesla would treat it like Porsche or Ferrari; a boutique company making only a relatively small number of rather pricey cars.

Speculawyer
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Speculawyer

LOL. Tesla just announced a follow-on offering and the stock price JUMPED on the day they announced it.

Tesla has an army of deep-pocketed supporters in Silicon Valley and elsewhere. The doubters just can’t seem to understand this.

Kaiser
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Kaiser

The stock jumled because the market was worried that Tesla would mismanage itself into bankruptcy. That fear has been postponed for more quarter.

Mikael
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Mikael

It is very fascinating how they managed to get a “big 3” without including BYD.

subspace
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subspace

Indeed

Just_Chris
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Just_Chris

+1

It’s like 1980 all over again except we’ve changed from:

“Japanese cars are unsafe, ugly and will never rival the mighty American auto industry”

to

“Chinese cars are unsafe, ugly and will never rival the mighty American auto industry”

Mister G
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Mister G

Nailed it, the only exception is TESLA MOTORS…I wonder if I would buy a Chinese made Tesla clone for a 50% discount? I’ve learned to never say never.

Scott
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Scott

I’m not really following this article or it’s logic. Just because Panasonic only has 1 customer, isn’t it still the largest manufacturer? Panasonic would likely be able to take on more customers if they could make more cells. Does this factor in the anticipated cell production for the GF, which will be…. Panasonic?

mr. M
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mr. M

Panasonic will get more than one customer if they offer large cell formats with the same price and energy density as the small Tesla cell format.

Mike I
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Mike I

The e-Golf currently uses Panasonic large format cells. However, it doesn’t look like VW is planning to continue in that direction unless Panasonic comes up with some new cells that meet their roadmap targets.

Chris O
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Chris O

LG certainly wins in terms of number of customers signed up for its batteries. Whether it will beat Panasonic in total production volume depends on whether assorted upcoming compliance offerings combined can beat the real vision based range of Tesla in terms of sales numbers corrected for battery sizes.

Rick Danger
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Rick Danger

Exactly right! How many BOLTS does GM plan to produce a year? 30,000. How many Model ≡’s does Tesla plan to produce a year? 500,000.

Chris O
Guest
Chris O

Well..actually 500K is the total number of cars Gigafactory could provide batteries for and Model 3 isn’t its only model and that was before Tesla hit the jackpot with its battery storage business that will come at the expense of capacity for cars.

But yes, the sort of output Tesla is shooting for is at least an order of magnitude larger than the sort of numbers others need for their compliance needs.

Speculawyer
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Speculawyer

Even if the GM Bolt is a very nice large-battery EV, it lacks a long distance charging infrastructure. That will be a serious sales impediment unless GM addresses that.

Kaiser
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Kaiser

Somehow the LEAF has sold 200,000 cars without this supposedly mandatory infrastructure. I don’t think it will limit sales for a decade or more.

Pushmi-Pullyu
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Pushmi-Pullyu

+5

Let’s also remember that the Supercharger network did not exist when Tesla started selling the Model S.

The Supercharger network is great, and it certainly has helped Tesla sell cars. But auto makers will be able to sell growing numbers of PEVs without having access to the Supercharger network.

TomArt
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TomArt

The point is not so much the network, as much as it is the charging speed. A 200-mile BEV is limited if you can’t charge it from 0 to 200 miles as fast as you can charge a Leaf from 0 to 86 miles.

Speculawyer
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Speculawyer

Yeah . . . good luck LG. None of your customers has a decent long-distance charging infrastructure. That is a big problem for them and You.

Just_Chris
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Just_Chris

but they do have PHEV’s, I prefer Tesla’s model but there is no sensible reason why we couldn’t have a future where each family has a 200 mile BEV and a 50-100 mile PHEV. There could also be a future for 50-100 mile PHEV’s as sole cars. or a future where everyone who takes road trips has a Tesla and the rest of us have a 200 BEV. Any of these futures could leave Tesla with 5% of the market.

Tesla is offering one solution for the future but it is not the only solution. there are many other options anyone of which could be more popular than a 200+ mile BEV and a 100 kW+ fast charging network. IMO pretty much the only auto-maker not providing a plausible future is Fiat.

Pushmi-Pullyu
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Pushmi-Pullyu
I think any discussion of competition between Panasonic and LG Chem over the EV battery supply market is misplaced. The plug-in EV market at present is only about 1% of the entire passenger vehicle market. There is an enormous potential for growth for both companies, and others besides. There is plenty of room for both LG Chem and Panasonic to grow their battery supply business at an astonishing rate, if that is what they want. Clearly LG Chem does want to grow at a very fast pace. I’m not at all sure that Panasonic does; Tesla has had to repeatedly coax and/or bribe Panasonic into ramping up battery cell supply, and has repeatedly and publicly threatened to go to Samsung for a supplemental supply. Over the past year or so, Tesla has had to drag Panasonic with obvious and considerable reluctance into partnership with the Gigafactory. From EV-related articles about Panasonic, you’d think that making batteries is their only business. In reality, Panasonic is a multi-national corporation with many diverse divisions. As the article says, “relying on just one large customer makes the Japanese company vulnerable.” That one customer, obviously, is Tesla. From Panasonic’s viewpoint, it might be best to… Read more »
sven
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sven

Pushmi-Pullyu said: “As the article says, ‘relying on just one large customer makes the Japanese company vulnerable.’ That one customer, obviously, is Tesla.”

You’re forgetting that Panasonic has another large customer besides Tesla whose name also begins with a “T” and ends in an “a”: TOYOTA. Panasonic currently makes Nickel Metal Hydride batteries for all of Toyota’s hybrids and its Mirai hydrogen FCV, and lithium-ion batteries for the Plug-in Prius and the European market Prius V hybrid. Toyota is switching to lithium-ion batteries for the next-gen Prius and other next-gen Toyota hybrids, and will be significantly increasing the size of the lithium-ion battery in the next gen Plug-in Prius, which is reportedly going to have 25 to 30 mile AER.

Pushmi-Pullyu
Guest
Pushmi-Pullyu

Thanks for the info, sven. I didn’t know that Panasonic was the supplier for the NiMH batteries in Totota’s non-plug-in Prius.

But I think the market for NiMH batteries is disappearing. The per-kWh price of li-ion batteries keeps dropping, while I think for NiMH batteries it has flattened out.

sven
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sven

But Toyota will be phasing out NiMh hybrid batteries for lithium-ion batteries in its hybrids. Although those hybrid batteries are much smaller than in PHEVs, EREVs, and BEVs, the large number of hybrids Toyota sells worldwide means that it will need a significant number of lithium ion batteries from Panasonic in the future.

Nix
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Nix

Frankly, I hope all 3 are very successful, and that they beat the REAL competition, which is ICE motor makers and oil companies.

May they all win against those competitors.

PatrickB
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PatrickB

Um, who cares? Is there a prize for being the largest battery producer? As long as Panasonic is making money and keeping busy with Tesla why would they really care if some other manufacturer is also getting larger. Not every company strives to be the “walmart” of there sector.