South Korea is backing plans by the country’s battery giants to inject a total of KRW2.3 trillion ($2.3 billion) into the sector over the next three years, to expand production and challenge China’s increasing dominance of the market.
The move, led by battery giants LG Chem, Samsung SDI and SK Innovation Companies is in response to Chinese sanctions the firms say effectively block the use of South Korean batteries in electric vehicles in China.
The three companies laid out their combined investment plans in a meeting with the South Korean minister for trade, industry and energy Paik Un-gyu. Representatives of battery material and equipment companies and the Korea Battery Industry Association also took part in the talks, the government confirmed.
Paik said the government and businesses should work together to benefit from the “huge growth potential of the secondary cell battery industry”.
According to a statement from the government, the package of investments would include KRW610bn ($541m) in research and development to improve secondary cells for electric vehicles. Facilities to be expanded as “pre-emptive measures to cope with expanding markets for electric vehicles and energy storage systems would include LG Chem’s Ochang plant, Samsung SDI’s Ulsan facility and SK Innovation’s Seosan production site.
South Korea’s government said it has “tried to solve problems” by raising the battery makers’ concerns through “various channels”, although China has yet to respond.
Media reports in Seoul claim such sanctions are linked to Chinese concerns over South Korea’s deployment of the US anti-missile Terminal High Altitude Area Defense (THAAD) System.