Korean media reported yesterday that Kia has selected CATL's batteries for its electric Niro SUV. Chinese media today quoted CATL sources as confirming the report.
(2022 Niro EV. Image credit: Kia)
Contemporary Amperex Technology Co Ltd (CATL, SHE: 300750) is gaining further ground as the world's largest supplier of power batteries, with a major South Korean carmaker becoming its new customer.
Kia, an affiliate of Hyundai Motor Co, has chosen CATL's batteries for its electric Niro crossover SUV to expand its range of battery suppliers, Hankook Ilbo said Wednesday, citing an unnamed Kia official.
The South Korean automaker also took cost competitiveness into account in making the decision for the Niro SUV, which is aimed at the mid-range rather than the high-end of the auto market, according to the report.
This is the first time Kia has installed China-made batteries in a family car, the report noted, adding that no financial or volume terms of the battery deal were disclosed.
On Thursday, Chinese media Cailian quoted CATL sources as saying the report was true, without giving more information.
So far, Hyundai and Kia have used batteries made by only two South Korean companies -- LG Energy Solution and SK Innovation's SK On -- for their electric vehicles in the South Korean market.
Analysts say Kia will be eager to reduce the cost of its Niro EV by using CATL batteries, which are considered more cost-effective, according to a Reuters report.
This seems to be a natural business for the South Korean automaker as they plan to boost electric vehicle (EV) sales and secure battery capacity, and relying on only a handful of battery suppliers could be a risk factor, the report said, citing Daol Investment & Securities analyst Kevin Yoo.
CATL dominates the global power battery market, with customers including Tesla, Volkswagen and most of China's homegrown EV makers, including NIO (NYSE: NIO, HKG: 9866, SGX: NIO) and XPeng Motors (NYSE: XPEV, HKG: 9868).
In the first quarter, CATL shipped 33.3 GWh of power batteries globally, with a 35 percent share, according to a report released in early May by Seoul-based SNE Research.
LG Energy Solution ranked second, with 15.1 GWh shipped in the first quarter and a 15.9 percent market share. BYD came in third, with 10.5 GWh shipped in the first quarter and an 11.1 percent market share.
Last year, Chosun Ilbo reported that CATL, along with LG Energy Solution and SK On, won a deal to supply batteries to Hyundai Motor Group, parent of Kia and Hyundai Motor Co.