Kia set for domestic EV launch using China’s CATL batteries
Kia plans to launch its midsize electric SUV, the EV5, in South Korea by the end of 2025.
The vehicle will feature nickel-cobalt-manganese (NCM) batteries supplied by China’s CATL, according to industry sources.
Production of the EV5 will start in the second half of the year at Kia’s Gwangju plant.
This model differs from the EV5 launched in China last year, which used BYD’s lithium iron phosphate (LFP) batteries known for cost efficiency.
The NCM batteries selected for the domestic market offer higher energy density and improved performance.
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The decline in Kia’s decision to use CATL batteries for the EV5 reflects a broader trend of eroding Korean dominance in the battery sector.
Korean manufacturers have seen their global EV battery market share drop to just 18.7% in Q1 2025, a significant decline from 23.2% the previous year, while Chinese manufacturers surged to control 67.5% of the market 1.
This shift represents a dramatic reversal from Korea’s previously strong position, with CATL alone capturing 40.2% year-on-year growth to 84.9 GWh of installations, demonstrating the scale of Chinese manufacturers’ expansion 2.
The competitive landscape has fundamentally changed as Chinese battery makers have leveraged government support and lower production costs to undercut Korean rivals, particularly in price-sensitive market segments 3.
Even Korea’s flagship battery manufacturer, LG Energy Solution, despite maintaining third place globally with a 14.1% market share, is struggling to match the momentum of Chinese competitors 1.
Kia’s decision to use CATL’s NCM batteries in the midsize EV5 SUV marks a significant strategy shift, as Korean automakers previously restricted Chinese batteries to smaller, lower-margin vehicles.
This transition from using Chinese batteries exclusively in models like the Niro EV and Ray EV to implementing them in larger vehicles signals growing confidence in Chinese battery technology and economics 4.
The move reflects broader industry pressures, as global automakers increasingly choose CATL batteries for their cost-effectiveness and performance advantages, particularly as government subsidies for EVs decrease and U.S. tariffs on car imports increase 4.
Chinese battery manufacturers have successfully expanded beyond their initial advantage in lower-cost LFP batteries to gain significant traction in the high-performance NCM market, traditionally dominated by Korean manufacturers 5.
This strategic pivot by Hyundai Motor Group demonstrates how economic realities are forcing even well-established automakers to prioritize cost-competitiveness over national supply chain loyalty.
The increasing adoption of Chinese batteries by Korean automakers creates a complex tension between economic benefits and potential safety and security risks.
Recent electric vehicle fires in South Korea have raised public safety concerns regarding the reliance on Chinese battery manufacturers, prompting the government to push for greater transparency about battery sourcing 6.
These safety incidents highlight the vulnerabilities in South Korea’s supply chain and the potential reputational risks for Korean automakers if quality or reliability issues emerge with Chinese-made components 6.
Korean battery manufacturers like Posco Future M are struggling with utilization rates below 30%, further weakening Korea’s position in the battery supply chain and increasing dependence on Chinese suppliers 3.
This situation exemplifies the broader challenge for advanced economies: balancing the immediate cost advantages of Chinese components against long-term concerns about technology independence and critical supply chain security.
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