Doosan Solus is highly likely to supply battery elecfoil to Tesla, a global electric vehicle manufacturer

Korean battery industry insiders say that Tesla has begun to make preparations for its own production of battery cells. http://www.businesskorea.co.kr/news/articleView.html?idxno=55939

Doosan Solus is reportedly set to sign an agreement with Tesla on battery elecfoil supply

“The company is working on the details of the deal," an industry insider said

“Tesla is currently conducting tests on samples from Doosan Solus, and I understand its response is positive”

Battery elecfoil is a thin sheet of copper film used to support the cathode of a secondary battery

It is as a pathway through which current flows

As demand for electric vehicle batteries is on a sharp rise, global demand for elecfoil is expected to grow +45% annually from 1.1 trillion won in 2018, market research firm SNE Research forecast

Doosan acquired Circuit Foil, a manufacturer of copper foil in Luxembourg, in 2014 to secure original technology for battery packs and enter the battery market

Doosan Solus is also expanding its plant in Hungary in line with a recent surge in demand

In late October, the company decided to invest 270 billion won to boost the capacity of its Hungarian plant by 15,000 tons

A bird's-eye view of Dusan Solus battery elecfoil plant in Hungary

It completed the first-phase construction of the plant in May 2020

When the second-phase expansion is completed in 2022 the plant’s annual production capacity will increase to 25,000 tons

Tesla's contract with Doosan Solus is good news to Korean materials companies

But at the same time, it will have a huge impact on Korean battery makers

If carmakers make batteries for themselves, Korean battery makers such as LG Chem and Samsung SDI will have to compete fiercely with none other than their previous customers

Tesla CEO Elon Musk said during a Battery Day event that Tesla will operate its own battery cell production plant with a capacity of 100 GWh by 2021 and 3 TWh by 2030

“If Tesla secures its own supply lines and starts producing cells, Korean battery makers will face enormous pressure from Tesla to cut prices," said a professor at a university in Korea

“I think that it will pose a major threat to the Korean battery industry in the mid- to long-term”

COMMENT

The key message from Tesla is actually that battery makers need to pursue greater innovation and creativity in bringing costs down

This will ensure future competitiveness, increasing revenues, and greater profitability

And all automakers will value this from their battery suppliers

Only the weak and thoughtless are at risk