South Korea’s government and top battery companies are set to invest 20 trillion won ($15.1 billion) in advanced battery technologies, including solid-state batteries, by 2030, according to the industry ministry.
This joint investment will enable South Korea to start commercial production of solid-state batteries before other countries.
The nation is home to three of the world’s top five electric vehicle (EV) battery manufacturers, including LG Energy Solution, Samsung SDI, and SK On. These companies control more than 25 percent of the global EV battery market, supplying major automakers such as Tesla, Volkswagen, General Motors, and Ford.
The three battery firms will construct pilot production plants in South Korea to act as their product and manufacturing innovation centers. The plants will be used to test and manufacture advanced products such as solid-state batteries, cylindrical 4680 cell batteries, and cobalt-free batteries before launching mass production from their overseas production sites.
Other battery makers, such as China’s CATL, are also racing to develop new battery technologies with better safety, higher energy density, and longer driving ranges than traditional lithium-ion batteries.
South Korea aims to quadruple domestic production capacity of cathode materials and triple exports of battery production-related equipment with this investment. This investment plan follows a 7 trillion won financial support plan announced by the government earlier this month to aid domestic battery makers investing in infrastructure in North America to cope with the US Inflation Reduction Act.
The US Inflation Reduction Act require 50 percent of the value of battery components to be produced or assembled in North America to qualify for a $3,750 credit, and 40 percent of the value of critical minerals sourced from the United States or a free trade partner also to qualify for the same credit.
Nearly 80 percent of EVs eligible for US federal tax credits use batteries from South Korea’s three major cell makers, according to an analysis from brokerage Korea Investment & Securities.