U.S. Rural Electricity Investment of $11 Billion China’s LEP Battery Benefits Korea ‘Regression’
It is expected that a large number of iron-based LEP battery storage devices developed and mass-produced by China will enter the U.S. Rural Electric Union with an 11 billion dollar subsidy, and the Korean battery industry will be pushed out.
US President Biden signed a subsidy of $11 billion on the 16th to rural electric cooperatives and electric intermediate charging stations, utilities and other energy suppliers.
The U.S. Department of Agriculture (USDA) said today that “rural electric cooperatives can apply for up to $7 billion in grants to deploy renewable energy, zero-emissions, and carbon capture systems.” Providers can also apply for additional partially forgivable grants to finance wind, solar, geothermal, biomass and other renewable energy projects.”
The change before the innovation of the electricity system in rural areas aims to mass-produce high-wage workers through the large-scale supply of large-scale batteries of solar power and battery energy storage systems (ESS) to rural areas.
Tesla, the largest electric vehicle in the US, chose iron-based batteries intensively, and China's LEP batteries began to expand from last March following the construction of GM's plant. <Tesla GM China’s ‘expansion’ with LEP batteries, LG Ensol ‘test’, see April 7, 2023>
Unlike Korean lithium batteries, CALT, China's largest iron-based battery manufacturer, has been excluded from the list of 'minerals' regulated by the Inflation Reduction Act.
Ford Motor Company owns 100% of the new battery plant to be built in Michigan last month. CATL is escaping from the Inflation Reduction Act with a factory system that only provides technology, and the Chinese LEP battery mass production system is expanding to large storage batteries in rural areas in the United States. .
China has a sodium battery mass production system that is hundreds of times cheaper than potassium, and applied to small cars and rural utility batteries.
On the other hand, LG Ensol invested $500 million (7.2 trillion won) in Arizona and started discussions last month to build an energy storage system (ESS) and cylindrical lithium iron phosphate (LFP) battery plant.
On March 25, LG Ensol invested 4.2 trillion won in a cylinder and invested 3 trillion won in an LFP plant, showing a system for converting ESS production later. <China's sodium battery compact car ESS 'mass production' Vs LG Ensol lithium sulfur battery 'development'. see 17 April 2023>
Bloomberg reported on the 15th that Korea has now started developing iron-based lithium iron phosphate (LFP) batteries, which have been neglected as flagship batteries, as they emerge. Korean batteries focus on nickel batteries (NCM) and ignore Chinese iron-based batteries. It has been aiming for high performance in driving electric vehicles. Bloomberg said that the perception of Korean battery makers, who had been sticking to NCM only, is changing as Chinese companies' technology development led the international market to improve LFP battery performance. Quickly jumping into the development of this LFP battery, LG Energy Solutions and Samsung SDI also announced that they are developing LFP cells for electric vehicles in their recent performance announcements.
According to SNE Research, the global combined market share of the three LG Ensol, Samsung SDI, and SK On companies fell from 30% in 2021 to less than 25% at the end of March this year, while the shares of CATL and BYD in China soared from 35.2% to 51.2%.
Bloomberg said, “It is difficult for Korean battery companies to apply LFP technology right away.” Therefore, a separate process must be added to remove traces of iron in the LFP manufacturing process, and the production cost cannot compete with China.”
Stellantis, an automobile company invested by LG Ensol, stopped construction of an electric vehicle battery plant while discussing with the federal government about plant support for the construction of a 45GWh battery joint venture with an investment of $ 4 billion in Ontario, Canada. Production construction only' announced the continuation.
A spokesperson for Stellantis told Reuters on the 15th that "the government has not implemented what was agreed to last year" and that "all construction related to battery module production at the Windsor site has been immediately suspended. Some construction related to battery cell production is continuing." .
Reuters said, “This measure came one month after Canada agreed to provide subsidies of up to Canadian dollars of up to 13.7 billion Canadian dollars to induce Volkswagen of Germany to build a battery plant in North America in Canada.” The announcement of the plant investment is an investment that the federal and provincial governments were also supposed to contribute, and at the time was the largest in the automotive sector in Canada.”
The federal government said it was consulting with Stellantis management and that the issue could be resolved.
“I am absolutely certain that we will negotiate, but I also believe that the federal government's resources are not limitless,” Canada's Finance Minister Chrystia Freeland told reporters on the day. I want to point that out," he said, according to Reuters.
"We have to act like the federal government did for Volkswagen," Ontario Prime Minister Doug Ford said in response to reporters' inquiries about the 'construction halt'. It seems to cause a conflict over 'government contract money'.
On the 16th, US President Biden vetoed a bill passed by Congress that abolished US tariff exemptions for solar panels imported from four Southeast Asian countries.
The White House has decided to exempt tariffs on imports of panels from Malaysia, Cambodia, Vietnam, and Thailand, which account for 80% of solar panels, and the US Commerce Department last year among imports from these countries, Chinese solar panel manufacturers completed products in Southeast Asian countries. announced that it was avoiding US tariffs.