South Korea has recently announced its ambitious plan to invest 20 trillion won ($15 billion) by 2030 to produce solid-state batteries, in a move to stay ahead of its competitors in the electric vehicle market.
The investment will allow South Korea to commence commercial production of these advanced batteries ahead of others in the industry.
The plan will be spearheaded by three of the world’s largest EV battery makers – LG Energy Solution Ltd, Samsung, and SK On – who will build pilot production plants in South Korea. The plants will serve as product and manufacturing innovation centers. Advanced products such as solid-state batteries, cylindrical 4680-cell batteries, and cobalt-free batteries will be tested and manufactured before mass production is launched from overseas production sites.
The race is on for EV battery makers to develop new battery technologies that offer longer driving ranges, higher energy densities, and better safety than conventional lithium-ion batteries. For example, Chinese battery giant CATL recently announced its plans to mass-produce a condensed matter battery that can power EVs.
However, even the world’s top battery maker has found it challenging to develop a technologically viable and competitive product based on solid-state batteries, a technology also being researched by Japan’s Toyota Motor Corp and Germany’s Volkswagen.
The South Korean government aims to quadruple the domestic production capacity of cathode materials and triple exports of battery production-related equipment with the investment.
This move comes after the government’s announcement earlier this month of a 7 trillion won financial support plan for domestic battery makers, aimed at helping them invest in infrastructure in North America to cope with the US Inflation Reduction Act. The Act requires battery components to be produced or assembled in North America to qualify for tax credits. Nearly 80% of eligible EVs for the US federal tax credit use batteries from South Korea’s three major cell makers.
With this investment, South Korea is poised to maintain its stronghold in the EV battery market, where it already dominates by controlling more than a quarter of the global EV battery market and supplying major automakers like Tesla, Volkswagen AG, General Motors Co, and Ford Motor Co.