Hyundai Steel to Enter Battery Materials Business
Hyundai Steel Co, a unit of South Korean automotive group Hyundai Motor Co., is expected to enter the battery materials business by supplying iron powder, a key battery raw material, to lithium ion phosphate (LFP) battery cathode makers as early as next year.
In partnership with battery materials manufacturers L&F Co., EcoPro BM Co. and LG Chem Ltd., Hyundai Steel is trial-producing iron powder for use in cathodes, a key component of lithium-ion cells, people familiar with the matter said on Friday.
Hyundai has received positive feedback from its battery materials partners, raising the chances of commercial production, sources said.
Shift to LFP Batteries
Korea’s three major battery manufacturers – LG Energy Solution Ltd., SK On Co. and Samsung SDI Co. – produced mainly nickel-cobalt-manganese (NCM) cells. But they are now shifting gears to produce low-end LFP cells on growing demand for the competing LFP type that is especially popular among entry-level EVs made by Tesla Inc. and other major electric vehicle manufacturers.
The Korean trio is expected to mass produce LFP batteries starting in 2026.
LFP Batteries: A Growing Market
Most LFP batteries are made by Chinese companies such as Contemporary Amperex Technology Co Ltd (CATL), the world’s top battery manufacturer, and BYD Co.
LFP cells are lower in energy density but cheaper to make compared to other types such as NCM batteries, making them more suitable for low-end EV models. LFP batteries are also more stable, making them less susceptible to fire.
Cathodes for LFP Batteries
Domestic battery materials manufacturers are preparing for LFP cathodes.
Companies such as L&F and EcoPro BM are expected to start mass production of LFP cathodes towards the end of 2026.
LG Energy’s Plans
LG Energy’s parent company, LG Chem, plans to begin mass production of LFP cathodes as early as 2027, according to industry officials.
LG Energy, the world’s second-largest battery maker, said in July it had won a multibillion-dollar deal to supply LFP batteries for low-end electric vehicles to Renault’s Ampere EV unit.
Hyundai Steel’s Foray into Battery Raw Materials
Hyundai Steel’s foray into battery raw materials comes as the domestic steel industry grapples with a supply shortage, spurred by aggressive steel exports from Chinese steelmakers.
Market analysts estimate Hyundai Steel’s operating profit this year at 450.3 billion won ($338 million), down sharply from the peak of 2.45 trillion won in 2021.
