SMM News: Kwon Young-no, executive vice president of Samsung SDI, said the company expects sales to rise and profits to rise as carmakers prepare to launch new or revamped electric vehicles and plug-in hybrid vehicles. In addition, as the South Korean market returns to normal and overseas demand from renewable energy projects in the US and Europe, the company expects its ESS sales to grow by the end of the year.
Samsung SDI expects ESS exports to account for 80-90 per cent of its product sales over the next few years, up from 50 per cent today. South Korea's ESS market is likely to stagnate in the coming years as a result of the South Korean government's decision to reduce renewable energy credit for power generation companies using such systems, a decision that will take effect from June next year. But Michael Son, senior vice president of battery marketing at Samsung SDI, says global demand for ESS will continue to grow until at least 2025, with an average annual growth rate of 30-35 per cent.
Demand for batteries for electric vehicles will grow faster. LG Chemistry, Samsung's SDI rival, said last week that global demand for electric car batteries would nearly quintuple to 596GWh by 2024. Battery makers are also rapidly increasing their production capacity, but Son says he doesn't think the market is at risk of becoming saturated in the short term. "the growth in capacity is in line with the supply schedule and quantity of each project, so I don't think we need to worry about oversupply now," he said. "
China is currently the world's largest market for electric vehicles, but it has been difficult for South Korean battery manufacturers to enter China because the Chinese government stipulates that electric vehicles that use batteries made abroad are not eligible for subsidies. Son said Samsung SDI will seek opportunities to expand in the Chinese market in the future, but they will still rely on their two factories in South Korea and carefully monitor the status of their customers' projects because "there are a lot of relevant factors to consider when entering the Chinese market."
Samsung SDI battery sales rose 5.4% in the second quarter from a year earlier to 1.82 trillion won ($1.54 billion). Its overall operating profit also rose 2.9% in the quarter.
The company has also set a double-digit growth target for its cylindrical battery sales. Samsung SDI says trade frictions between China and the United States have reduced demand for small lithium batteries used in electronic devices, but sales of cylindrical batteries will continue to rise as larger devices, such as vacuum cleaners and large power tools, begin to use the technology. The company expects global demand for cylindrical batteries to rise to 10 billion by 2025, up from a forecast of 5.5 billion earlier this year.
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