Hyundai to develop own cheaper batteries for EVs

Hyundai Motor Group is expected to develop its own price-competitive lithium iron phosphate, or LFP, batteries for electric vehicles late next year to reduce dependence on China-made batteries, industry sources said Monday.

According to media reports, under the two-year joint project with Korea-based battery makers that started this year, Hyundai will complete development of LFP batteries in 2024.

The batteries will be installed in Hyundai and Kia’s small and entry-level electric cars and midpriced EVs from 2025.

A Hyundai Motor Group official declined to comment on the matter, citing confidentiality, and said, “We are looking into working with small battery makers as well as large companies (like LG Energy Solution, Samsung SDI and SK On) here in Korea.”

Hyundai aims to maximize the battery cell’s capacity to the highest level of more than 60 amperes. Its energy density will be around 300 watts per kilogram. The company plans to improve the product’s voltage and capacity to similar levels of premium nickel, manganese and cobalt, or NCM, batteries.

Industry insiders say the carmaker’s bold move to make its own batteries comes after its commitment to distance itself from Chinese battery makers in producing cost-effective EVs.

The Hyundai Kona EV, an electrified version of the small sport utility vehicle, and its smaller sibling Kia’s compact sedan Ray EV are equipped with China-based CATL’s LFP batteries.

But with the deepening tech trade war between China and the US and its allies, including Europe, Hyundai Motor Group, which operates one of the largest EV businesses in the US, has been under pressure to join the decoupling push.

Hyundai’s own battery business can also ramp up low- and midpriced electric car production, which is gaining more traction amid a worldwide EV sales slump, according to experts.

“With prolonged economic slowdown and high inflation, customers, who are interested in electric cars, are eyeing entry-level and less pricey EVs,” said Lee Ho-geun, a car engineering professor at Daeduk University. “Like the world’s top EV makers Tesla and BYD, if Hyundai develops more EV batteries, it can boost production and cut the overall costs.”

In June, Hyundai Motor Group CEO Chang Jae-hoon unveiled an investment plan worth 9.5 trillion won ($7.3 billion) for battery development and technologies over the next 10 years. Chang vowed that the company will jointly develop LFP, NCM and all-solid-state batteries in coordination with battery manufacturers and academic institutions.

Following the master plan, the first Hyundai-made NCM battery for its hybrid cars, a product of a business tie-up with SK On, was installed in the hybrid version of the company’s new midsize SUV Santa Fe, launched in August.

Commercial production of the battery was previously expected to come next year, however Hyundai moved up the schedule. The carmaker led the processes of battery materials certification, design and testing while enhancing performance – approximately 10 percent greater battery efficiency compared to the previous car model.

For research and development of lithium-ion and next-generation all-solid-state batteries, Hyundai plans to work with the US-based firms Solid Energy System and Solid Power.

It also looks to open a new research building in its Uiwang research center in Gyeonggi Province for lithium-ion and all-solid-state batteries by next year. Building a small-scale pilot production line is under consideration to test and improve the performance of the batteries.