[Electric Vehicle Era] Persistent Battery Workforce Shortage Despite Year-Round Hiring and Preemptive Recruitment

Surge in Electric Vehicles Boosts Domestic and Global Battery Demand
Supply Shortages Persist Despite Workforce and Facility Expansion
3,000 Personnel Shortage in Domestic Battery Design and Processes
Increased Dependence on China for Battery Materials and Finished Products
Lithium Battery Trade Balance Expected to Hit 10-Year Low

Editor's NoteAccording to the Ministry of Trade, Industry and Energy, 117,000 electric vehicles were sold from January to September this year. This figure has already surpassed the total annual sales of 97,000 units from the previous year. Last month, for the first time ever, electric vehicle sales exceeded those of hybrid vehicles. As we enter the full-fledged era of electric vehicles, major domestic companies including automakers as well as SK, LG, Hanwha, and LS are moving swiftly to capture the expanding market. Just 20 years ago, smartphones were merely a distant future imagination. Now, we are preparing for a mobility revolution comparable to that of smartphones. This article examines the current issues and challenges faced by the automotive industry in transitioning to the era of electric vehicle popularization..

An engineer is disassembling the Rivian R1T electric truck battery pack at Monroe headquarters in Auburn Hills, Michigan, USA.

[Asia Economy Reporter Choi Dae-yeol] At Northvolt, considered the largest battery company in Europe based in Sweden, a large number of employees from the three major Korean battery companies (LG Energy Solution, Samsung SDI, SK On) and Japan’s Panasonic have been recruited. According to a search on the recruiting site LinkedIn, there are more than 70 such employees. They work in various roles without distinction, including research and development positions such as battery cell design, purchasing, sales, power, and human resources. Northvolt, which gained recognition through investment from Volkswagen, Europe’s largest automaker, is expanding its production and R&D bases across Europe, including Sweden and Germany, as well as worldwide.

The domestic battery industry is also steadily recruiting personnel both internally and externally. The number of employees at the three major domestic companies has increased by more than 2,000 compared to a year ago. Despite continuous hiring, the industry complains of a labor shortage because the market is growing even faster. Electric vehicle production and sales are rapidly increasing in the world’s three major automaking markets: Europe, China, and now the United States.

An industry insider said, "Although it has been relatively less highlighted due to vehicle semiconductor supply disruptions, it is true that battery supply is tight in major markets as well," adding, "Especially, battery specialists are difficult to train in a short period, so a mismatch in labor supply and demand is expected to continue for a considerable time."

According to the Korea Battery Industry Association and related industries on the 21st, the shortage of battery personnel is estimated to be around 3,000 people (as of the end of 2020), covering research, design, and process fields. Each major battery company operates a year-round open recruitment system for engineers in key areas such as manufacturing, quality, and design, or even requires registration in a talent pool, reflecting the difficulty in securing personnel. The rapid increase in industry-academia cooperation programs at major domestic universities recently also indicates the growing need to proactively secure talent.

Along with the labor shortage, localization of production facilities and diversification of raw material supply sources are urgent issues for domestic automakers and battery companies. The U.S. Inflation Reduction Act (IRA) has just been enacted, and Europe is expected to release a draft of its Raw Materials Act early next year. These measures aim to boost regional production capacity and reduce dependence on China. For South Korea, which has become highly dependent on China in the electric vehicle battery sector, these are likely to act as trade restrictions immediately. According to the Korea International Trade Association, 95% of lithium compound imports, a raw material for battery cathodes, came from China. The proportion of Chinese imports was about 85% last year but has increased even further this year.

Imports of finished lithium-ion batteries used in electric vehicles and home appliances have also surged because domestic production alone cannot meet demand. This year, lithium-ion battery exports reached approximately $5.42 billion, an increase of about 26% compared to last year, while imports rose to $3.98 billion, increasing by more than 80% during the same period. As imports have increased more than exports, the trade surplus has been shrinking year by year.

The battery trade surplus peaked at $3.43 billion in 2019 but has steadily declined since then, reaching just over $1.4 billion in the first nine months of this year. It is expected to be around $1.7 billion annually, the lowest level in the past decade.

Hyundai Motor and Kia, which account for most domestic electric vehicle production, had a domestic battery installation rate exceeding 50% of total electric vehicles until 2018, but this year, the share of Chinese batteries has surged to 86%. An industry insider said, "To qualify for electric vehicle tax credits under the U.S. Inflation Reduction Act, local final assembly and sourcing of battery raw materials from the U.S. or countries with free trade agreements (FTA) with the U.S. must increasingly be ensured," adding, "It is not easy to simultaneously resolve labor shortages, diversify raw material supply sources, and localize production facilities within a short period."

The dedicated electric vehicle Ioniq 5 being produced at Hyundai Motor Company's Ulsan plant

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