Government conglomerate Ford CALT Battery reveals ignorance to ‘losing’ IRA

The strategy of relying on the US Inflation Reduction Act (IRA) to block Chinese lithium iron phosphate LEP batteries that are 2/3 the price of Korean 3-ion batteries and to grow rapidly in the Korean stock market has failed.
The U.S. changed battery minerals from China to ‘produced in the U.S.’ for anode materials for LEP batteries by supporting renewable battery companies.
On the 9th, the US Department of Energy announced a $200 million loan to Redwood Materials, a Nevada-based producer of anode materials for electric vehicle batteries.
The Korean government and three chaebols led the entry into the U.S. market for batteries, which began with a subsidy from the U.S. IRA and mass-produced foreign currency debt in the U.S. as a joint venture in which half of the shares are invested by the chaebol. It is pursuing a paid-in capital increase of $2.4 billion (3 trillion won) with US private equity fund Black Rock and MBK Partners.
The government strengthened its strategy of 'pressing the Democratic Party and the White House for revision' from last year's midterm elections by connecting with the Republican Party based on the regulation that IRA subsidies for Hyundai Motor's US plant investment were limited to 'finished cars in the United States'. It was neutralized when it agreed to maintain the IRA in solidarity with France.
The Michigan state government's construction of a technology cooperation plant between Ford and China's CALT, led by the Democratic Party, put a brake on Korea's advance into ternary batteries.
In Korea, nickel-cobalt-manganese (NCM) batteries are the main focus, and all three companies, LG, SK, and Samsung SDI, rely on the development of 'cobalt-free' batteries in preparation for China's low-cost LFP at the level of LFP research and development, and LG Ensol and Samsung SDI increase the proportion of manganese. Higher manganese-rich batteries are being developed, and SK On announced that they are developing battery products that use less cobalt.
According to SNE Research, an international energy market research, the share of the three Korean companies in last year's battery survey was 53.4%, down 2.2%p from the previous year (55.6%). GWh), the market share increased by 8.3%p from 14.0% to 22.3%.
According to SNE Research data, CATL usage (battery usage) in the global market excluding China increased by 131% last year.
Nickel Cobalt Manganese (NCM) batteries, the battery producers of the three Korean conglomerates, put forward the advantage of long mileage, but Vice President Lisa Drake, who is in charge of introducing LFP at Ford, conducted a preliminary market research and found that the manufacturing cost was 2 On the 13th, it revealed '8% profit' as the reason for the decision, choosing cost reduction by LEP battery of /3 level.
Last year, LG Ensol's global market share fell by 6.1%p from 19.7% to 13.6%, SK On's from 5.7% to 5.4%, and Samsung SDI's from 4.8% to 4.7%.
According to SNE Research data, the total use of electric vehicle batteries registered in countries around the world last year was 517.9GWh, an increase of 71.8% from 2021, and the market share of the three Korean companies decreased by 6.5%p from 30.2% in 2021 to 23.7% in 2022.
China's CATL, which ranked first, saw its battery usage double from 99GWh to 191.6GWh, and its market share rose from 33.0% to 37.0%.
China's BYD, which ranked third, increased its market share from 8.7% to 13.6%, becoming similar to that of LG Ensol.
The combined market share of the six Chinese companies in the top 10 in global market share soared from 48.2% in 2021 to 60.4% in 2022.
CATL (Contemporary Amperex Technology Limited) battery cell factories had 13 of its own factories in Europe and Asia before Ford's $300 million.
Ford's new plant in Michigan is dedicated to LFP's lithium, iron, and phosphate batteries, and does not contain expensive minerals such as cobalt and nickel, which are mainly used by Korean batteries.
"The point of this project is to lower the cost of electric vehicles," Ford CEO Jim Farley said at the event on the 13th, saying, "LFP is the cheapest battery technology."
Regarding Ford’s Michigan plant, “Ford executives initially considered building factories in Canada and Mexico, but chose the US site after President Biden signed the Inflation Reduction Act last year.” It has provided tax incentives to companies, and car buyers can claim a tax credit on electric vehicles manufactured in North America that contain batteries and raw materials from the region or other US trade allies,” the NYT reported on the 13th.
CATL's founder and CEO Robin Zeng launched the company in 2011 in his hometown, an impoverished region of fishing villages and rice fields on the northern outskirts of Ningde, halfway between Shanghai and Hong Kong.
CATL has one-third of the world's 100,000 employees in Ningde, an impoverished village.
CATL unveiled the inside of the lithium iron phosphate battery production plant at the Ningde plant to foreign reporters on the 12th in line with Ford's announcement of the battery plant.
“The process is that aluminum foil, about one-tenth the thickness of a human hair, is coated with a very thin layer of lithium, iron and phosphate, and copper foil is coated with a very thin layer of graphite,” the NYT said. A large spool of both types of foil together with a spool is used to wind the alternating layers together to create the core of each battery cell, then the core is clamped tightly onto a gray machine the size of a city bus.”
The article goes on to say, “Bright orange 10-foot-tall robots, like those used on car assembly plant welding lines, pick up rows of battery cores and place them in a cold press for compression, where they are passed through a kiln where they are heated to 105 degrees Celsius to remove traces of water. “The 300-yard long hall where the batteries are made is already kept much drier than the Sahara,” he said. It is tightly sealed,” he said of the production process.
SK On's sales last year were 7,617.7 billion won, and its operating loss was 991.2 billion won, a sharp increase of more than 300 billion won from the previous year (683.1 billion won).
In a conference call (telephone conference) announcing earnings, SK On said that the US IRA (Inflation Reduction Act) is positive for improving profitability, and announced '4 trillion won' as the expected amount of SK On benefits from this year to 2025.
SK On's debt size increased by 13.9773 trillion won from the end of last year to 43.915 trillion won, and its debt ratio increased by 35% to 188% during the same period.
Net debt was KRW 14,514.8 billion, an increase of KRW 6,101.9 billion from the end of the previous year due to facility investment.
At the end of the first quarter of last year, LG Ensol had dollar assets of 2,959.7 billion won and dollar liabilities of 4,306.3 billion won.
LG Ensol announced in October last year that a 10% increase in the won-dollar exchange rate would result in a loss of 134.6 billion won.

LG Ensol's 4th joint venture with GM collapsed last month.

President Yoon Seok-yeol specified US capital investment by 'chaebol' for the first time at the Korea-US summit in May last year.
In its <Integrated National Strategy: Korea> released on June 21 last year, the US State Department said, “Korea needs to improve its export control and investment review system, and Korean conglomerates should invest more in safer and more sustainable supply chains. In particular, semiconductors, high-performance batteries, core minerals, and biopharmaceuticals” were revealed as detailed strategies.
The Yoon Seok-yeol government signed a joint statement by the President of the United States of America in May of that year, “an agreement to strengthen public-private cooperation to promote the protection of core and emerging technologies, including advanced semiconductors, batteries for eco-friendly electric vehicles, artificial intelligence, quantum technology, biotechnology, biomanufacturing, and autonomous robots” and “semiconductor In order to discuss the promotion of resilient supply chains for key items such as batteries and core minerals, a regular ministerial-level supply chain industry dialogue agreement was stipulated. revealed
<Biden 'Korean company representative American worker excellent investment', September 6, 2022. Honda, LG Ensol joint venture EV battery allocation of $350 million, ‘management leadership’, dated October 12, 2022. Ford Motor China and iron phosphate battery factory Korea SK on 'joint venture' and gap, dated February 14, 2023. Ford Motor Company and China CATL $3.5 Billion Battery Factory SK On 'Blow', February 11th. US-Germany-French IRA ‘Agreement’ vs. Korea ‘Continuing Amendment to the US in Union with Europe’, see Feb. 9>