South Korean battery manufacturers are set to benefit from the 145 percent tariff imposed by the second Donald Trump administration in the US on Chinese-made goods, including lithium-ion batteries for energy storage systems. This significant tariff hike aims to curb the competitive edge of Chinese batteries, which previously capitalized on lower levies than electric vehicle cells. On April 10, the White House said that the 125 percent tariffs on Chinese imports would rise from 34 percent to 125 percent, on top of an existing 20 percent tariff. This unprecedented increase is part of measures addressing concerns over fentanyl influxes from China, effectively raising the prices of Chinese products 2.45 times. According to a report by the Atlantic Council, think tank, China exported lithium-ion batteries worth $15.3 billion to the US last year. With tariffs, the value of these exports could soar to approximately $37.5 billion this year if trade volumes continue at a similar scale, making Chinese cells much more expensive in the US market. South Korean market tracker SNE Research noted that Chinese firms captured an 87 percent share of the North American ESS battery market in the same period. China's weakening price advantage “Chinese lithium iron phosphate (LFP) batteries have been well-received in the US due to their competitive pricing over Korean rivals,” said an industry source on condition of anonymity. “These LFP products, which allow for a larger number of cells to be used compared to EVs, where the battery space is smaller, have been preferred by data centers for their cost efficiency.” China was able to dominate the ESS market in the US by setting low battery export prices per kilogram, widening the gap with Korean competitors. As of last November, the cumulative Chinese exports to the US totaled 678,000 tons – roughly 11.7 times greater than South Korea’s 58,000 tons, according to the Atlantic Council. Boon for Korean batteries? LG Energy Solution is shifting its focus towards cost-effective LFP batteries for the US market, moving away from nickel, cobalt and manganese (NCM) cells. “Due to the rising uncertainties on US trade policies, we cannot predict the impact of Trump’s 145 percent tariffs on the Chinese companies,” said an LG Energy Solution official. “But one thing we can say for certain is that, with our seven battery manufacturing facilities, we are in the best position even among Korean companies to capitalize on our early US market penetration.” The company looks to expedite mass production of LFP pouch cells at its Michigan plant by converting some of the production lines from EVs to ESS by later this year, a year ahead of its initial schedule. This strategic adjustment is intended to achieve cost-efficiency by using existing infrastructure rather than building a new facility. Last month, the battery giant forged an agreement with Taiwan-based Delta Electronics to supply ESS cells in the US worth 4 GWh, enough to power over 400,000 households, by 2030. The company recently secured a $301 million deal to supply its flagship Samsung Battery Box (SBB) 1.5 to the US-based NextEra Energy. Although the company did not specify where the SBB 1.5 cells would be produced, sources predict it would be from its Ulsan plant or Hungary facility – both of which are expected to be imposed with a 25 percent tariff, lower than Chinese rivals’ 145 percent. While boosting the sales of the SBB 1.5, it also plans to add the LFP version to the new SBB 2.0 that boasts enhanced cost competitiveness and capacity, which is set to start mass production from the first half of next year. Samsung SDI is also considering establishing a North American production base for ESS. SK On is gearing up to launch LFP pouch cells for ESS, with the goal of achieving a meaningful outcome by late 2025. It strategically targets the US market, leveraging its Georgia plant and four new bases established through joint ventures with Hyundai Motor Group and Ford. According to Global Market Insights, research firm, the US ESS sector is expected to expand from last year’s $10.67 billion to $1.49 trillion by 2034, achieving an average annual growth rate of 29.1 percent.     (ICE SEOUL)

Fonte notizia: The Korea Herald