Global Battery Innovation Led by Korea: Paradigm Shift in the Energy Storage Market by 2025

In the latter half of 2025, the global energy storage market is undergoing rapid changes centered around the technological innovations of Korean companies. According to market research firm SNE Research, as of the third quarter of 2025, Korea’s LG Energy Solution, Samsung SDI, and SK On hold a 51.2% share of the global battery market, significantly outpacing China’s CATL (31.4%) and BYD (12.8%). Notably, Korean companies are demonstrating technological superiority in the energy storage system (ESS) sector. LG Energy Solution, headquartered in Cheonan, Chungcheongnam-do, began commercial production of next-generation NCMA (Nickel-Cobalt-Manganese-Aluminum) batteries last October, which are evaluated as innovative technology that improves energy density by 15% and extends lifespan by 20% compared to existing batteries.

The growth of Korea’s battery industry is supported by active government policies and the global energy transition trend. The Ministry of Trade, Industry and Energy’s ‘K-Battery Belt’ project aims to solidify Korea’s position as the world’s leading battery powerhouse by investing 61 trillion won in the battery industry by 2030. Under such policy support, Korean companies are significantly expanding their research and development (R&D) investments. Samsung SDI announced that it has set its 2025 R&D budget at 1.2 trillion won, a 35% increase from the previous year, with a particular focus on solid-state battery technology development. Samsung SDI, headquartered in Suwon, Gyeonggi-do, is known for its solid-state batteries, which reduce fire risk by 90% compared to conventional lithium-ion batteries while tripling charging speed.

The global energy storage market is expected to grow from approximately $12 billion in 2025 to $34 billion by 2030, with an average annual growth rate of 23.2%. The main drivers of this rapid growth are the expansion of renewable energy and the increasing demand for grid stability. According to a report by the International Renewable Energy Agency (IRENA), global solar power installations surpassed 1,400GW in 2025, and wind power reached 950GW. The proliferation of these intermittent renewable energies inevitably increases the need for large-scale energy storage systems. As of November 2025, California is operating battery storage facilities totaling 8.5GWh, a 45% increase from the same period last year. Korean companies supply more than 60% of these batteries, proving the global competitiveness of Korean battery technology.

From a technological perspective, the most significant topic in the battery industry in 2025 is the commercialization of next-generation battery technology. SK On, located in Wanju, Jeollabuk-do, announced in September this year that it had started the world’s first pilot production of lithium metal batteries. This technology replaces the existing graphite anode with lithium metal, enhancing energy density by 40% while halving charging time. SK On’s lithium metal batteries enable electric vehicles to travel over 800km on a single charge and 400km with a 10-minute charge. This breakthrough development is expected to simultaneously solve the charging time and driving range issues, the last hurdles to the widespread adoption of electric vehicles.

Intensifying Competition with China and Market Restructuring

Despite the advances of Korean battery companies, Chinese companies continue to pursue aggressively. CATL, headquartered in Ningde, Fujian Province, China, launched its ‘Qilin 3.0’ battery in October 2025, achieving an energy density of 300Wh/kg, reaching a level comparable to the latest technologies of Korean companies. Notably, CATL announced a pricing strategy for the Qilin 3.0 battery, setting the price at $80 per kWh, which is 27% cheaper than the average price of $110 from Korean companies. This is interpreted as a strategy to penetrate the market with price competitiveness as the technological gap narrows.

Another major Chinese battery company, BYD, is taking a unique approach in the lithium iron phosphate (LFP) battery sector. Headquartered in Shenzhen, Guangdong Province, BYD launched the ‘Blade Battery 2.0’ in the first half of 2025, announcing a 20% improvement in energy density over existing LFP batteries. LFP batteries are safer and have cheaper raw material costs than nickel-cobalt-based batteries, making them competitive in the mid-to-low-end electric vehicle market. In fact, the market share of LFP batteries in China’s electric vehicle market reached 65% in the third quarter of 2025, up 7 percentage points from 58% in the same period last year. The spread of China’s LFP batteries poses a new challenge for Korean companies.

Fierce competition is also unfolding in the battery markets of the United States and Europe. Tesla in the United States is expanding the production scale of its self-developed 4680 batteries at its Nevada Gigafactory from the second half of 2025. Tesla’s 4680 battery is reported to have five times the energy capacity and six times the power output of the existing 2170 battery, while reducing production costs by 14%. CEO Elon Musk announced in October that “we plan to expand the annual production of 4680 batteries to 100GWh by 2026.” This is expected to act as a new variable in the North American battery market, which has been led by Korean companies.

In Europe, Sweden’s Northvolt is gaining attention. Headquartered in Stockholm, Northvolt announced in September 2025 that it had started commercial production at its Gigafactory in Heide, Germany. Northvolt’s batteries are differentiated as eco-friendly batteries by increasing the proportion of recycled materials to over 50%, reducing the carbon footprint by 70% compared to existing batteries. According to the European Union’s new battery regulations, batteries sold within the region must meet recycled material ratio and carbon footprint standards from 2030, and Northvolt is leveraging these regulations as a competitive advantage. Northvolt announced that it secured long-term supply contracts worth a total of $55 billion from European automakers such as Volkswagen, BMW, and Volvo in the first half of 2025.

New Opportunities in the Energy Storage System Market

Unlike the fiercely competitive electric vehicle battery market, the energy storage system (ESS) market provides new growth momentum for Korean companies. The global ESS market size is expected to grow from approximately $8.5 billion in 2025 to $28 billion by 2030, with an average annual growth rate of 27%. The background of this rapid growth is the global demand for grid modernization and renewable energy integration. As of November 2025, Korea Electric Power Corporation has completed the installation of a total of 2.1GWh of ESS nationwide, with over 95% of the products supplied by domestic battery companies. In particular, LG Energy Solution’s ESS batteries offer a 20-year warranty and have demonstrated a capacity retention rate of over 85% after 20 years in actual performance data, proving high reliability.

The expansion of Korean battery companies’ ESS business in the U.S. market is accelerating. Texas is undertaking a large-scale ESS construction project totaling 15GWh to prepare for the surge in power demand due to extreme heat in the summer of 2025. LG Energy Solution is expected to supply 40% of the batteries for this project, while Samsung SDI will supply 25%. LG Energy Solution’s Texas ESS project, with a capacity of 2.5GWh, is the largest single-site project in the world, capable of supplying power to approximately 500,000 households for four hours. The successful completion of this project is evaluated as an important milestone for Korean battery companies to establish themselves as key partners in the global power infrastructure market.

Korean companies are also making significant advances in the commercial and industrial ESS market. In October 2025, Amazon announced a project to install a total of 5GWh of ESS in its global logistics centers, with 60% of the supply expected to come from Korean companies. Amazon’s goal for ESS adoption is to achieve carbon neutrality in logistics operations by 2030 and reduce electricity costs by 30%. Samsung SDI’s commercial ESS is analyzed to reduce electricity bills by an average of 25% by lowering power usage during peak hours. Additionally, it plays a crucial role in ensuring the continuity of logistics operations by providing emergency power for up to eight hours during power outages.

The residential ESS market is also rapidly growing. The cumulative installation of home solar-ESS linked systems in Germany surpassed 800,000 households in 2025, a 35% increase from the same period last year. SK On has launched the ‘Home Battery Pro’ targeting the German market, attracting attention. This product, with a capacity of 10kWh, can cover the daily electricity usage of a typical household and achieve over 90% power self-sufficiency when linked with solar panels. Coupled with the German government’s residential ESS subsidy policy, SK On’s market share in Germany’s residential ESS market reached 15% in the third quarter of 2025.

The battery recycling market is also emerging as a new growth driver. According to the International Energy Agency (IEA), the global volume of waste batteries is expected to reach approximately 11 million tons by 2030. In response, Korean companies are actively investing in the development of battery recycling technology. LG Energy Solution is constructing a battery recycling plant with an annual capacity of 20,000 tons in Cheongju, Chungcheongbuk-do, aiming for operation in the first half of 2026. This plant will apply technology that can recover over 95% of key raw materials such as lithium, nickel, and cobalt from waste batteries. The quality of recycled raw materials will be maintained at the same level as newly mined raw materials, while production costs are expected to be reduced by 30%, playing a crucial role in securing cost competitiveness in battery production.

As of the second half of 2025, the global battery industry is at a turning point where technological innovation and market expansion are occurring simultaneously. Korean companies maintain their market-leading position based on technological superiority but face challenges from China’s price offensive and the U.S. and Europe’s domestic company nurturing policies. The success or failure of the battery industry in the future is expected to be determined by the speed of next-generation technology development, production cost competitiveness, and sustainability. For Korean battery companies to maintain a continuous advantage in this multifaceted competition, not only technological innovation but also diversification of the global supply chain and the establishment of eco-friendly production systems are essential.

For investors, the battery industry remains an attractive growth sector. The global battery market maintains an average annual growth rate of over 20%, and particularly the ESS and recycling sectors offer new revenue generation opportunities. However, fluctuations in raw material prices and geopolitical risks are factors that must be carefully considered when investing. In the long term, the continuous development of battery technology and the acceleration of energy transition are expected to support industry growth, and companies with both technological prowess and market position are likely to remain attractive investment targets.