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Thursday July 10 2025

Chinese battery firms target Korea for global expansion

10 July 2025 09:00 (UTC+04:00)
Chinese battery firms target Korea for global expansion

By Alimat Aliyeva

Chinese electric vehicle (EV) and battery companies are increasingly turning to Korean partners as they push ahead with global expansion efforts, signaling a shift in China’s traditionally closed-off supply chain, Azernews reports, citing Korean media.

Once resistant to foreign players, China’s supply chain appears to be evolving, creating new opportunities for Korean battery makers, who have been navigating a slowdown in domestic demand. This shift has raised expectations that Korean companies may find new avenues for growth abroad.

According to industry sources, LG Energy Solution recently secured a significant battery supply deal with Chery EV, a subsidiary of China’s Chery Automobile. Under the agreement, LG Energy Solution will supply 8 gigawatt-hours of its 46-series cylindrical batteries over six years, beginning in early 2024. The contract, valued at more than 1 trillion won ($726 million), will see the batteries used in vehicles produced at Chery’s European manufacturing plant.

Industry analysts view this partnership as a major breakthrough in a market that has long been considered tough for foreign entrants. As Chinese automakers seek to expand globally, their growing focus on international markets—particularly in Europe—is often complicated by regulatory barriers, such as tariffs on Chinese-made batteries, supply chain disruptions, and intellectual property issues.

Chery, a state-owned automaker, has been making significant strides in its global push. Last year, it exported roughly 1.1 million vehicles, accounting for 46% of its total sales of 2.4 million units. This underscores the company’s determination to become a formidable player in international markets.

With Chinese EV exports on the rise, industry insiders predict that additional partnerships with Korean firms will follow. While Chinese-made batteries dominate the domestic market, Korean companies are likely to find significant opportunities in supplying overseas-bound Chinese EV models. Key to these partnerships will be the development of next-generation battery technologies and innovation in energy storage.

Choi Jae-hee, senior researcher at the Korea Institute for International Economic Policy, believes the Chery deal is a sign that even Chinese state-owned enterprises are open to collaboration with Korean firms. He added, “Sectors like robotics and urban air mobility are still in early stages in both China and Korea. If Korea can lead in these next-gen technologies, its top three battery makers could capture more market share in China.”

At the same time, Korean battery materials suppliers are making moves to deepen ties with Chinese companies. With Chinese battery makers facing growing trade barriers in Europe, they are increasingly turning to Korean firms for local production support. This creates a mutually beneficial relationship where both sides’ interests align.

For instance, Solus Advanced Materials recently announced a deal to supply copper foil to CATL, China’s largest battery maker. The materials will be shipped from its plant in Hungary to CATL’s European factory. CATL, which plans to operate a massive 100-gigawatt-hour facility in Hungary by year’s end, views this deal as a testament to its competitiveness in terms of quality, local supply, and response speed.

Another key player, Lotte Energy Materials, began construction in June on its first European plant in Spain, which is expected to start production by 2028, with an annual output capacity of 30,000 tons of copper foil.

However, China's increasing push into Korea’s battery sector also presents new challenges. CATL, which opened a Korean branch earlier this year, is expected to pursue deeper partnerships with Hyundai Motor and Kia. Kia’s upcoming EV, the PV5, will feature CATL’s ternary lithium batteries, marking a significant shift in the competitive landscape.

At the same time, Korea’s top three battery makers—LG Energy Solution, SK Innovation, and Samsung SDI—are increasingly sourcing materials from Chinese suppliers in a bid to stay price-competitive. This highlights the growing interconnectedness between China and Korea in the global battery market.

An industry insider summed up the situation by saying, “Ultimately, domestic firms in both countries will defend their home turf through superior technology, while also expanding into each other's markets by building stable, overseas production networks.”

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