South Korean automotive giants Hyundai and Kia have taken action to challenge China’s dominance in the battery market. The two companies have signed a strategic cooperation agreement with the country’s three largest battery manufacturers: LG Energy Solution, Samsung SDI, and SK On. This historic partnership marks the first time that South Korean auto and battery manufacturers have united against China.

Hyundai and Kia Collaborate

The agreement focuses on improving the quality and safety of battery technologies. Announced at Hyundai Motor’s R&D Center in South Korea with the participation of government representatives, the companies will combine their expertise to carry out joint projects.

The joint efforts focus on five main areas: new safety patents, digital battery passports, design, production quality, and fire safety technologies. Hyundai emphasizes that developing safer battery technologies will enhance the country’s competitiveness.

Last September, it was reported that Hyundai and Kia were working on lower-cost lithium iron phosphate (LFP) batteries. This move is reportedly being undertaken to compete with Chinese battery giants CATL and BYD.

The data clearly demonstrates China’s leadership in the battery market. According to SNE Research, CATL and BYD alone accounted for more than 55 percent of global electric vehicle battery sales in the first half of this year. During the same period, the combined market share of LG, SK On, and Samsung decreased from 21.8 percent to 16.4 percent.

This decline highlights the importance Korean companies place on collaboration. Kim Dong-myung, CEO of LG Energy Solution and Chairman of the Korea Battery Industry Alliance, described the global electric vehicle market as a field of “international competition” and stated that companies from these countries must unite in this endeavor.