[THE INVESTOR] Samsung SDI and LG Chem, the nation’s big two battery makers, are gauging the impact of their recent exclusion from a tentative list of companies that are subject to the Chinese government’s subsidies for electric vehicles.
Amid its toughened control over EVs, China has required related companies to pass an enhanced evaluation process to get benefits from the government’s consumer subsidies using their batteries or other key parts.
But in the latest fourth evaluation session, Korea’s Samsung and LG, the leading players in the global EV battery, failed again to be included in a tentative list of 31 companies that was announced on June 20.
“We had some issues in preparing related documents,” said a Samsung SDI spokesperson. “We will make more thorough preparations for the next evaluation session.”
With two more evaluation sessions remaining, those who are not included in the final list will not be able to receive EV subsidies from January 2018.
Their final exclusion is expected to become a huge blow to the Korean duo. Both companies have poured considerable resources into the all-important Chinese markets, including planned construction of new EV battery plants.
“Samsung SDI’s small and midsize battery sales could fall below 1 trillion won (US$860 billion) if China risks continue,” said Kwon Sung-ryul, an analyst of Dongbu Securities. China sales make up almost 30 percent of Samsung SDI’s EV battery sales.
