The financial results for the year ending December 2024 of the three major Korean battery manufacturers all showed a decrease in sales compared to the previous year due to the sluggish sales of EVs worldwide. Unable to recoup the amount of upfront investment they had made in anticipation of the increasing shift to EVs, the companies are reviewing their plans for increased production.
SK ON has announced that it will delay the startup of its new U.S. plant, which was planned for 2025. LG Energy Solution, the largest company in South Korea, also reported a decline in both revenue and profit. Sales fell 24% and operating profit fell 73%. This is the first time since the company became an independent battery-focused subsidiary of the LG Group in 2020 that it has seen a decline in both sales and profits. Samsung SDI also saw a 23% drop in sales and a 76% drop in operating profit.
Source: The Nikkei
PSR Analysis: The global slowdown in EV demand is having a direct impact on the battery industry, which is one of South Korea’s core industries. Probably the biggest factor is the withdrawal of EV support policies by the Trump administration in the United States. All three companies mentioned above have continued to invest to establish a system of increasing production on the premise that demand will continue to grow in the future.
If this stagnation continues, the impact on South Korean battery manufacturers will be enormous. In China, where the same EV support policies are in place as before, Chinese battery manufacturers have an advantage in terms of price competitiveness, and their technological development is also faster than that of their South Korean counterparts. As global EV demand slows, it is predicted that competition for the limited number of battery manufacturers will continue to intensify, and it is worth paying attention to the strategies South Korean manufacturers will adopt to meet this challenge. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
