Growing US Battery Market: Korean Companies to Capture Over Half in 5 Years

US Battery Market Share, 2020 Panasonic Leads with 46%
By 2025, LG and SK Expected to Surpass 50% Combined... Samsung Also Weighing Options

A battery manufacturing plant being built by Ultium Cells, a joint venture between LG Energy Solution and US-based GM, in Rose Town, Ohio. The completion is scheduled for next year.

[Asia Economy Reporter Choi Dae-yeol] The U.S. vehicle lithium battery market, which was around $1 billion in 2017, grew to approximately $1.39 billion last year. The industry expects it to reach $1.99 billion by 2023 and $2.8 billion by 2025. The U.S. is considered one of the world's three largest automobile markets alongside China and Europe, but it is regarded as somewhat behind in electric vehicle adoption.

However, since President Joe Biden took office, the administration has been actively addressing climate change issues and driving the expansion of electric vehicle adoption. As a result, it is expected that the U.S. will soon lead global electric vehicle demand. While demand for Tesla, which has emerged as the world's largest electric vehicle manufacturer, remains steady, American automakers such as General Motors (GM) and Ford are gradually getting their electrification strategies on track and releasing new models. Brands with significant local sales like Toyota, Hyundai, and Volkswagen are also preparing to increase electric vehicle adoption in the U.S.

Tesla charging at Tesla Seoul Jongno Supercharger in Seoul

LG Expands Investment in the U.S... Joint Ventures and 145GWh Capacity Expansion
SK Considering Fourth Plant in Georgia... Investment Over 5 Trillion Won

Global battery makers LG Energy Solution and SK Innovation are expanding production facilities in the U.S. to keep pace with the growing local electric vehicle market. Batteries are a key component that determines the core competitiveness of electric vehicles, such as driving range and safety, and supply is expected to fall short of demand for several years to come.

Batteries, unlike general industrial products, are difficult for latecomers to replicate by simply observing finished products from leading companies, and having production processes in place does not immediately translate to market supply. They also do not have the fluctuating sales characteristics influenced by consumer marketing like finished vehicles.

According to data compiled by market research firm IBISWorld, the top vehicle battery supplier in the U.S. last year was Japanese company Panasonic. Supplying batteries for Tesla Model 3, Model S, and Model X, Panasonic holds nearly half of the market share at about 46%. LG Energy Solution, which supplies batteries for Chevrolet Bolt, Ford Focus, and GM Spark electric vehicle models, ranks second with about 11% market share. EnerSys (U.S.), A123 (China), and Samsung SDI (Korea) each hold around 2-3%. SK Innovation, which is completing a local plant this year and starting pilot production, currently has no local supply.

SK Innovation's electric vehicle battery factory under construction in Commerce, Georgia, USA. Plant 1 (right in the photo) was recently completed, with the goal of producing prototypes within this year. Plant 2 (left) is currently under construction.

The local battery facility expansion competition is led by LG and SK. LG recently announced plans to increase production capacity to 145GWh annually, nearly 30 times its current output, through solo investments and joint ventures with GM. This capacity corresponds to batteries for 2 million electric vehicles.

SK is also actively moving forward, resuming construction of its second local plant after delays due to lawsuits. It has invested about 3 trillion won so far and plans to increase this to over 5 trillion won. SK's battery production last year was about 40GWh, and it has announced plans to triple this to 125GWh by 2025. The Georgia plant, SK's production base in the U.S., plays a crucial role. The first plant was just completed, and the company is considering up to a fourth plant.

"By 2025, LG Expected to Hold 41% and SK 12% of Production Capacity"
Samsung SDI Also Weighing U.S. Production Plant

With these expansions, the industry expects Korean companies to account for more than half of local battery supply within a few years. According to Kyobo Securities Research Center, by 2025, LG Energy Solution is estimated to hold about 41% and SK Innovation about 12% of U.S. electric vehicle battery production capacity. Samsung SDI is also considering establishing local battery production facilities. Currently, Samsung operates only a plant that imports battery cells and assembles packs in the U.S.

Given the U.S. government's exclusive policies favoring domestic batteries in electric vehicles and the need to export to Canada and Mexico, Samsung SDI is seen as needing local production facilities as well. Currently, the top player Panasonic is expected to shrink to about 19% by 2025. Japanese companies have traditionally been conservative about expanding their scale, and Chinese companies' local investments are limited due to potential trade disputes, so Korean battery companies' market share is expected to increase.

This content was produced with the assistance of AI translation services.