Hyundai Motor has chosen SK Innovation and CATL as its suppliers for its third batch of batteries for E-GMP electric vehicles launching after 2023, TheElec has learned.
LG Energy Solution was not named as a vendor for the third volume. However, the company will supply batteries through its joint venture with Hyundai to be set up in Indonesia, people familiar with the matter said. These batteries will be used for Hyundai Ioniq 7
CATL will will supplying batteries for two models out of the three planned by Hyundai to launch after 2023. CATL was also the supplier of the second volume.
SK Innovation was the supplier for the first volume of E-GMP.
Hyundai likely chose CATL to expand in China, one of the largest markets for electric cars alongside Europe. The South Korean auto-giant will likely benefit from subsidies in China as it had a production subsidiary in Beijing for a long time and it had used multiple local battery makers such as CATL before.
For CATL, winning the recent contract with Hyundai means its already sizable remaining order will increase even more. It has already won orders from Volkswagen, BMW, Daimler and Audi. It is pressuring the three South Korean battery makers with its price competitive products.
CATL overtook Samsung SDI as the largest battery supplier to BMW within three years thanks to its competitive price. In November 2019, it won a 7.3 billion euro order from BMW __ Samsung SDI at the time won one worth 2.9 billion euro. BMW asked for class three or better batteries (class one being the best), and Samsung SDI provided class one batteries while CATL offered class three.
CATL is offering its batteries at a price of under US$100 per kWh, according to people familiar with the matter. This is below the average market price of US$135 per kWh, according to Bloomberg NEF.
Hyundai’s car models with CATL will likely be aimed at the Chinese market, one of the person said. BMW iX3 electric cars that used CATL’s batteries suffered from fires, which raised doubts on the Chinese battery maker’s outlook, they said. However, its technology level three years down the road may be substantially upgraded, they added.