{"id":2206148,"date":"2024-08-14T14:48:38","date_gmt":"2024-08-14T05:48:38","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206148"},"modified":"2024-08-15T14:52:26","modified_gmt":"2024-08-15T05:52:26","slug":"electric-vehicle-fires-expose-risks-for-rok-of-relying-on-chinese-batteries","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/08\/electric-vehicle-fires-expose-risks-for-rok-of-relying-on-chinese-batteries\/","title":{"rendered":"Electric vehicle fires expose risks for ROK of relying on Chinese batteries"},"content":{"rendered":"
A rash of <\/span>high-profile electric vehicle (EV) fires<\/span><\/a> has ignited concerns among the South Korean public about the safety of EVs, and the government responded on Tuesday by urging automakers and importers to <\/span>voluntarily disclose<\/span><\/a> the manufacturers of their EV batteries.<\/span><\/p>\n But the measure is likely to focus attention on South Korea\u2019s heavy reliance on Chinese battery manufacturers, exposing critical supply chain vulnerabilities that threaten the competitive standing of ROK automakers in the global market.<\/span><\/p>\n The controversy over the safety of EV batteries also risks contributing to geopolitical tensions as Seoul finds itself squeezed between China and the U.S., forcing South Korea to carefully consider how to adapt its supply chains for long-term economic success.<\/span><\/p>\n DEPENDENCY ON CHINA<\/b><\/p>\n South Korean automakers are deeply reliant on Chinese battery manufacturers. Among those that have voluntarily disclosed their EV battery information, about <\/span>35%<\/span><\/a> of their batteries are sourced from Chinese companies, including leading manufacturers like CATL and Farasis.<\/span><\/p>\n This reliance is concerning given the strategic importance of battery technology in the global transition to electric vehicles. The heavy use of Chinese batteries highlights the dominance of Chinese firms in the global battery market.\u00a0<\/span><\/p>\n For instance, CATL accounted for nearly <\/span>26%<\/span><\/a> of the global non-China EV battery market in January, surpassing South Korea\u2019s LG Energy Solution, which held a 24% share.<\/span><\/p>\n This dependency has gained <\/span>significant<\/span><\/a> media<\/span><\/a> attention<\/span><\/a> in the ROK as Chinese batteries have been linked to recent fires. <\/span>Farasis<\/span><\/a>, whose batteries were implicated in a fire involving a Mercedes-Benz EQE two weeks ago, had previously been cited as a reason behind a <\/span>2021 recall<\/span><\/a> by China-based BAIC of roughly 32,000 EVs.<\/span><\/p>\n While there is no evidence to suggest that Chinese-manufactured EV batteries are more likely to combust than those made in other countries, disclosing such information risks eroding consumer confidence in brands that rely on these batteries.<\/span><\/p>\n The lack of evidence notwithstanding, disclosing the use of Chinese batteries may damage automakers\u2019 brand reputation, which could translate directly into a decline in sales. For instance, the backlash from the Mercedes-Benz EQE fire may deter consumers from considering not only the company\u2019s vehicles but also other brands that use similar Chinese batteries.<\/span><\/p>\n If South Korean consumers perceive that their domestic automakers are overly dependent on Chinese components, it could lead to a broader erosion of trust in these brands.<\/span><\/p>\n Moreover, automakers that are unable to demonstrate a commitment to sourcing safe and reliable components may struggle to compete. The potential decline in sales due to reputational damage could have long-term consequences for South Korean automakers\u2019 profitability and global standing.<\/span><\/p>\n