Image: Mason Trinca | The Washington Post | Getty Images
South Korean auto parts suppliers continue to benefit from the growth of the electric vehicle business, with Tesla as the main driving force. The American manufacturer has many suppliers in the Asian country who are now looking to expand their business to the U.S.
Tesla's Korean parts suppliers include LG Energy Solution, Samsung SDI, SK Innovation, L&F, Hanwha, and a number of second-tier companies. Tesla and 15 other EV makers collectively bring in $1.14 trillion to Korean suppliers, with Tesla accounting for 74 percent of the total, according to an estimate released Wednesday by Bernstein analyst Toni Sacconaghi, a seasoned battery analyst, according to The Korea Times.
"Today's rapid growth of EVs and the sector's positive growth outlook are based on governments' shift toward supporting net-zero initiatives, but I would say Tesla was the hidden force that has pushed major carmakers toward an early retirement for conventional vehicles. The focus is more investors are justifying EV valuations and trying to find listed Korean materials and parts suppliers that have been included or will be included in Tesla's battery supply chain," a senior manager at a US-based investment bank in Seoul said, adding he invested "millions of dollars" in Tesla's Korean suppliers with a hefty return ratio.
Assuming Tesla's possible outreach toward pure EVs and its expansion into energy storage systems (ESS) in China and Europe, given proven on-time delivery, better pricing, and massive volume production, Korean suppliers will benefit from a "Tesla effect" over the next few years, said the manager. Tesla will continue to work with its Korean suppliers of parts and materials as trade rivalries between China and the U.S. escalate, according to industry sources.
© 2021, Eva Fox | Tesmanian. All rights reserved.
_____________________________
We appreciate your readership! Please share your thoughts in the comment section below.
Article edited by @SmokeyShorts, you can follow him on Twitter
About the Author
Eva Fox
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.
