The ongoing urea solution shortage in South Korea is just the trailer. The real movie hasn’t even started yet.
China can always send another wave of supply chain crises to Korea, and next time, the electric vehicle battery industry could be the target.
According to Hana Financial Investment Thursday, electric vehicle batteries manufactured in South Korea by LG Energy Solution, Samsung SDI and SK On are heavily dependent on Chinese metals.
“The three companies source 71 percent of cobalt, 63 percent of manganese and 82 percent of lithium from China. Such heavy reliance on China won’t be much different for their overseas production facilities in Europe or the US,” said Kim Hyun-soo, an analyst at Hana Financial Investment.
“Depending on how strongly Beijing weaponizes those metals, Korean battery firms’ dominance in the global market can fade rapidly.”
EV batteries use expensive metals as raw materials, including cobalt, nickel and manganese. These metals take up 70-80 percent of total costs. If China limits the supplies of just one of those metals, the Korean battery trio, despite controlling 40 percent of the global EV battery market, could suddenly find their existence under threat.
And China’s weaponization of metals has already begun.
Manganese cartel
Manganese is a common metal produced pretty much anywhere on Earth, but China produces more than 90 percent of the “high-purity” manganese used for EV batteries.
Dozens of Chinese manganese companies in October last...
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