The subsidy policy of lithium-ion batteries has become questionable. While Japan's subsidies are flowing to Samsung, China has strengthened its protective policy. There are signs of the approach of the trade conflict.
Market overview of China and Japan
The Japanese government is subsidizing home-use storage batteries, but roughly 60% are flowing to Samsung SDI. Meanwhile, the Chinese government is limiting subsidies to local companies such as BYD.
Samsung supplies to Japan's largest customer
Samsung is supplying batteries to Nichicon, the top share company in Japan's domestic home-use storage batteries. It is said that Samsung succeeded in outwitting Japanese manufacturer by giving a 10-year warranty which conservative Japanese manufacturer cannot give in fear of fire accident.
A subsidy that should grow domestic enterprises is ironically helping enemies. It can be said that Samsung's strategic victory by winning around Nichicon.
China aiming to repeat the solar industry
The Chinese government is aiming to repeat the solar cells in lithium-ion batteries. The basic strategy is attracting foreign investments and technology transfer to local, and then eliminating foreign player by dumping.
The Chinese government suddenly announced that it would limit the EV battery subsidies only for lithium-iron-phosphate (LFP) batteries because of the safety only in name and in fact, restricting LG and Samsung. In addition to poor performance, LFP can only produce Chinese companies substantially due to patent reasons.
LG and Samsung may have no choice but to sell the factory in China. Panasonic much less affected because its sales from Chinese EV market is little.
Survival strategy of Panasonic
Even in the automotive market where Panasonic concentrate on for survival, the momentum of Chinese and Koreans is increasing. Panasonic seems to compete by strengthening partnerships with car manufacturers such as Toyota and Tesla, but it is just buying time.
What should be done for Japanese manufacturing industry so as not to repeat failures of solar cells or liquid crystal panels? One way is thoroughly resist dumping with protective tariffs and cartels. On the other hand, giving up as lithium-ion batteries has become commodities, it is another way to survive by shifting to the cutting edge area such as advanced materials and special purpose power supply modules.