January 24, 2025: South Korea has scrambled to shore up the country’s faltering battery sector with an initial cash infusion worth close to $15 billion, as a global slump in EV sales takes its toll on the industry.
The Ministry of Trade, Industry and Energy (MOTIE) said on January 15 the KRW21 trillion jumpstart was needed to ensure Korean battery production for EVs and energy storage systems can remain competitive at home and abroad.
The move came after Korea’s LG Energy Solution, a major player in the global EV battery market, unnerved investors on January 9 reporting an operating loss of KRW223 billion ($154 million) for the fourth quarter of 2024.
That followed analysis, released on December 10 by BloombergNEF, showing that global battery prices last year saw their biggest annual drop since 2017.
Lithium ion battery pack prices dropped 20% from 2023 to a record low of $115 per kilowatt-hour, BNEF said.
In addition to the slowdown in EV sales, other factors driving the decline included cell manufacturing overcapacity, economies of scale, low metal and component prices, adoption of lower-cost LFP batteries.
MOTIE’s announcement came just a day ahead of a report published by Invest Korea — the national investment promotion agency — warned domestic demand for secondary batteries was down nearly 22% and expected to fall further because of “shrinking production and sales of EVs”.
MOTIE said the government’s intervention, dubbed “measures to strengthen competitiveness of eco-friendly vehicles and secondary batteries”, was designed to address the slowdown in demand, develop cutting-edge technology, strengthen the secondary battery ecosystem and respond to external uncertainties.
The lion’s share of the investment, around KRW8 trillion, is targeted to support the secondary battery industry — which analyst S&P Global said represented a 32% increase over funding in 2024.
MOTIE minister Ahn Deok-geun said the world in 2024 faced slowing auto sales and an “EV chasm”. The auto industry in 2025 will continue to face heightened global uncertainty.
Overall domestic vehicle sales in 2024 in Korea were 1.63 million units, a 6.5% decrease from 2023, largely due to a decrease in consumer sentiment and slowing demand for EVs, the minister said.
However, MOTIE said domestic “eco-friendly” cars, in particular hybrids, are bucking the trend, by showing an increase in sales of more than more than 18% over 2023 to 650,000 units.
Meanwhile, reports in Korean media claimed cathode materials company EcoPro had delayed completion of its Pohang facility by two years, until December 2026, as a result of a fall in orders.
Batteries International cannot confirm those reports, but can confirm that EcoPro founder, Lee Dong-chae, has ordered a major shakeup of the organization “to overcome the crisis” facing the sector.
