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Chinese battery firms reach out to Korea in global expansion push

Published: 09 Jul. 2025, 19:18 Updated: 09 Jul. 2025, 19:22

Solus Advanced Materials’ copper foil plant in Hungary [SOLUS ADVANCED MATERIALS]

Chinese electric vehicle and battery companies are increasingly reaching out to Korean partners as they push forward with global expansion.

Once largely closed off to foreign players, China’s supply chain appears to be shifting, raising expectations that Korean battery makers — currently weathering a slowdown in demand — may benefit from new opportunities.

Industry sources said on Wednesday that LG Energy Solution recently signed a major battery supply contract with Chery EV, a subsidiary of China’s Chery Automobile. LG Energy Solution will supply 8 gigawatt-hours' worth of its 46-series cylindrical batteries over six years, starting early next year, under the agreement. The estimated contract value exceeds 1 trillion won ($726 million). The batteries will be installed in vehicles produced at Chery’s plant in Europe.

Analysts view the deal as a significant breakthrough in what has long been seen as an impenetrable market. Chinese automakers are expanding overseas as their domestic EV market matures, but selling Chinese EVs abroad, especially in Europe, comes with regulatory hurdles including tariffs on Chinese-made batteries and issues related to supply chains and patents.

Chery, a state-owned automaker, exported roughly 1.1 million vehicles last year — about 46 percent of its total sales of 2.4 million units — indicating a strong global push.

Industry insiders expect more Korean partnerships to follow as Chinese EV exports increase.

While Chinese-made batteries dominate vehicles sold domestically, Korean firms may find opportunities supplying overseas-bound models. Experts note that advancing next-generation technologies will be key to expanding these partnerships.

LG Energy Solution’s 46-series cylindrical battery [LG]

“Chery’s deal sends a signal that even Chinese state-owned firms are open to working with Korea,” said Choi Jae-hee, senior researcher at the Korea Institute for International Economic Policy. “Sectors like robotics and urban air mobility are still in early development in both countries. If Korea leads in these next-generation technologies, its top three battery makers could gain more ground in China.”

Korean battery materials suppliers are leveraging their European production bases to deepen ties with Chinese firms, while Chinese battery makers, facing rising trade barriers in Europe, turn to Korean companies for local production support — aligning both sides’ interests.

Solus Advanced Materials announced last month a deal to supply copper foil to China’s CATL. The company will ship the materials from its plant in Hungary to CATL’s factory in Europe. CATL plans to operate a massive facility in Hungary with an annual capacity of 100 gigawatt-hours by the end of the year.

"The deal proves its competitiveness in quality, local supply and response speed," Solus Advanced Materials said.

Lotte Energy Materials, another copper foil manufacturer, began construction in late June on its first European plant in Spain. The facility is expected to begin commercial production in 2028 with an annual output of 30,000 tons.

But China’s deepening push into Korea’s battery sector also presents a challenge.

CATL, which established a Korean branch earlier this year, is expected to seek deeper partnerships with Hyundai Motor and Kia. Kia recently equipped its upcoming purpose-built electric vehicle, the PV5, with CATL’s ternary lithium batteries.

Korea’s top three battery makers are, at the same time, increasingly sourcing from Chinese material suppliers to stay price competitive.

“In the end, domestic firms will likely defend their home turf through superior technology while expanding into China by building stable overseas production networks,” an industry insider said.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY CHOI SUN-EUL [[email protected]]