The competitiveness of Korean battery makers -- LG Energy Solution, Samsung SDI and SK On -- continues to be threatened by the seemingly unceasing growth of Chinese rivals, a global electric vehicle battery usage report showed Monday.

According to SNE Research’s analysis, the three Korean battery makers’ combined share in the global EV battery sector logged 20.2 percent between Jan. and Oct. this year, down 3.5 percentage points from the same period last year.

The decline came even though all three firms’ global EV battery usage displayed year-on-year growth. LG Energy Solution’s worldwide battery usage grew 6.4 percent, accounting for 11.8 percent of the total share while ranking third behind Chinese battery makers CATL and BYD. SK On and Samsung SDI grew by 9.5 percent and 2.3 percent, respectively, each taking up 4.5 percent and 3.8 percent of the total battery usage.

The Korean battery makers’ global battery usage share stood at 31.7 percent in the Jan. to Oct. period in 2021, not too far behind CATL and BYD’s combined share of 39.7 percent. However, the Chinese battery firms’ dominance has surged in the last few years as their market share soared to 53.6 percent in the first ten months of this year.

SNE Research noted that major automakers such as Tesla, BMW, Mercedes-Benz, Volkswagen and Hyundai Motor are choosing CATL batteries for their EVs.

“(Chinese battery makers) are forecast to rapidly expand their worldwide market share by overcoming the issue of oversupply in the (Chinese) domestic market through exports to other countries including Brazil, Thailand, Israel and Australia,” said SNE Research.

Outside China, LG Energy Solution, Samsung SDI and SK On combined for a 45.6 percent market share between Jan. and Oct., a 2.7 percentage point fall from the same period last year. CATL held its ground by taking up 26.4 percent of the market to retain its first-place ranking that excluded EV battery usage in China.

SNE Research pointed out that Chinese automakers face difficulties bolstering their presence in the European market due to the European Union’s decision to impose hefty tariffs on Chinese-made EVs.

With that, the report said Chinese battery firms’ European entrance could encounter speedbumps but underlined that Korean battery makers are unlikely to receive much benefit from the anti-China tariffs due to the weakening EV demand in Europe.

“CATL has a more diversified customer portfolio than Korean (battery) companies, maintaining a high profitability based on its cost-competitive batteries ranging from the LFP battery and the prismatic (NCM) battery,” said SNE Research.

“While Chinese EV makers and battery companies are forced to slow their growth (in Europe), Korean battery firms should speed up the development and production of LFP batteries and prismatic form factors to strengthen competitiveness.”

An official working in the battery industry underscored that China’s battery technology has already caught up to that of Korean firms or even surpassed it, adding that Korean firms are at a critical juncture.

“China’s domestic market provided ample opportunities for the Chinese homegrown battery firms to develop their technologies beyond tests within laboratories whereas Korean firms lacked such chances,” said the official.