U.S. Big 3 Hybrid Sharp Turn, LG Ensol Samsung SDI Battery ‘Fatal Injury’
As the Big 3 American automobile companies make a sharp shift to focusing on hybrids this year, Korea's investment in batteries in the United States appears to be suffering a fatal blow.
Reuters reported on the 15th, citing Morgan Stanley, that hybrid sales in the United States increased five times faster than electric vehicle sales in February.
Ford Motor Co. said hybrid sales rose 37% in the first two months of the year, driven by demand for its hybrid Maverick light truck, which starts at $25,315, Reuters said.
The plug-in hybrid version of the Jeep Wrangler SUV accounted for half of all U.S. Wrangler sales in the second half of 2023, Stellantis said.
As the U.S. auto market sees a surge in sales of gasoline-electric hybrid vehicles and cooling sales of electric vehicles, automakers and suppliers are betting that consumer demand for a compromise between pure combustion and all-electric will be a continuing trend.
Automakers had once planned to phase out purely electric vehicles, industry executives and analysts told Reuters.
Automakers and suppliers are adding capacity to build gasoline-electric hybrid and plug-in hybrid vehicles for the U.S. market in response to growing consumer demand for GM's hybrid technology.
"We had to rush to add production capacity for the Maverick," said Jim Baumbick, Ford's vice president of product development, of the hybrid surge. "We added a third shift to keep up with the demand." told Reuters.
Supporters of stronger limits on internal combustion engine emissions have begun predicting that the Biden administration could provide incentives for automakers to sell more plug-in hybrids with internal combustion motors.
“Hybrids are a great hedge against administrative changes that would take pressure off of them from a regulatory perspective,” Mark Wakefield, head of AlixPartners’ global automotive practice, told Reuters.
Analysts say most existing automakers are losing money on electric vehicles, and hybrids are a more profitable way to reduce CO2 emissions if future administrations change course.
The industry's shift to hybrids is challenging the Biden administration's pro-electric vehicle climate policies and environmental groups who want automakers to phase out CO2-emitting internal combustion engines as quickly as possible.
Data from AutoForecast Solutions shows North American hybrid production could rise to 20% of total light vehicle production by 2025, dwarfing the 14% increase in pure electric vehicles (EVs), according to Reuters.
Sam Fiorani, AFS vice president, said in a Reuters interview, "While the forecast for electric vehicles decreased by about 1 million units last year, hybrid model volumes surged by almost the same amount."
Germany's Schaeffler, a producer of electric axles used in hybrid drive systems, plans to invest $230 million in a new plant in Dover, Ohio, USA, to expand its production capacity for hybrid production.
Schaeffler currently supplies key components for the hybrid system provided in the Ford F-150 pickup truck.
Ford told Reuters it plans to double the hybrid F-150's share to 20% of sales.
Marc McGrath, head of Schaeffler's U.S. operations, said in an interview with Reuters that hybrid powertrains would be adopted more widely in full-size pickup trucks and full-size sport utility vehicles (SUVs). "We are in discussions with all the major automakers in that segment." “I see it happening,” he said.
As for the Ford F-150, which was the best-selling vehicle last year in the United States, hybrid sales increased to about 35% of all dealer F-150 sales in December last year.
The 2024 Ford F-150 Hybrid is sold at the same price as the F-150 equipped with a 3.5-liter turbocharged EcoBoost engine, and fuel efficiency is guaranteed at 24 km per gallon.
Toyota, long the leader in the U.S. hybrid market, plans to significantly increase the number of hybrid models and overall sales of hybrids.
"Last year, 29% of sales were hybrids, compared to 37% in the same period last year, but we expect this to reach close to 45% of total volume this year," Toyota brand chief David Christ told Reuters.
Toyota's next-generation Camry sedan, the most popular in the United States, will be sold only with a hybrid powertrain starting this year.
Reuters reported that Toyota lowered the price premium it charges for hybrids compared to internal combustion engine vehicles of the same class as it expanded its production scale.
Hybrid drastically reduced the price gap from $6,000 to $7,000 to the current $1,500 and $2,000, drastically adjusting the price burden on consumers.
SNE Research data shows that last year, the number of electric vehicle sales increased by 33.5% to 14.07 million units, but electric vehicle battery usage only grew by 38.8% from 503GWh to 698GWh, showing a clear slowdown in demand compared to the 109% surge in 2021 and 57% growth in 2022. .
SNE data revealed a 13% drop in battery selling prices and a 17% plunge in four major materials, including cathode materials.
The business reports released on the 15th by LG Energy Solutions and Samsung SDI, which are expanding battery investment, showed that each company's R&D expenses expanded significantly last year compared to 2021 and 2022, which were in a boom period.
LG Ensol's R&D expenses last year were KRW 1.0374 trillion, an 18.4% increase from KRW 876 billion the previous year.
Samsung SDI increased by 5.6% to KRW 1.1364 trillion as of the same period.
Compared to 2021, LG Energy Solution and Samsung SDI surged by 58.6% and 29.5%, respectively.
Samsung SDI said in its 4th quarter conference call, “It is difficult to say that demand growth in all global markets is slowing down,” and added, “North America, which had a relatively low penetration rate of electric vehicles, is expected to see an annual growth rate of more than 50% due to demand for the U.S. Inflation Reduction Act (IRA) policy. “It is expected that demand will grow rapidly this year,” he said.
LG Ensol increased its workforce by 27.2% from 9,564 in 2021 to 12,166 last year, and Samsung SDI increased its workforce by 10.4% from 9,300 to 10,271.
In a joint statement at the Korea-US summit in May 2022, President Yoon Seok-yeol signed an “Agreement on public-private cooperation to protect and promote key emerging technologies for eco-friendly electric vehicle batteries (omitted)” and expanded investment in US factories by conglomerates such as SK, LG, and Samsung. .
Investors in the Korean stock market concentrated on rechargeable battery-related companies last year, leading to an explosive rise in stock prices, which has been on a downward trend since then.