Global Dominance: South Korean Battery Giants
As of 2022, South Korean battery giants such as LG Energy Solution, Samsung SDI, and SK On (a subsidiary of SK Innovation) collectively commanded a 49% share of the global battery market, excluding China. Despite this market dominance, the joint statement from various ministries highlighted the vulnerability arising from their reliance on foreign nations for critical materials, emphasizing the imperative need for diversification.
The South Korean government unveiled a comprehensive plan to infuse 38 trillion won (approximately $29 billion) into fortifying its South Korean battery industry over the next five years. This strategic move comes amidst intense global competition for securing battery supply chains.
To address these challenges, South Korea intends to implement a range of measures. Tax incentives and loan support will be extended to domestic companies venturing abroad to secure mining rights for essential minerals and other battery materials related to the South Korean battery industry. Additionally, financial assistance will be heightened for companies engaged in the refinement and recycling of minerals.
Financial Support for Industry Firms
The government plans to amplify financial support through loans, guarantees, and insurance from institutions like the Export-Import Bank of Korea to benefit battery industry firms. This support extends to those investing in North America, aligning with the requirements for tax allowances under the U.S. Inflation Reduction Act (IRA).
Despite a tempered sales outlook for South Korean battery firms in 2024, attributed in part to a deceleration in electric vehicle sales due to increased auto financing costs, the announced measures are strategically designed to enhance the long-term competitiveness of the country’s South Korean battery industry, aspiring to claim the top spot globally.
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