The Global Hegemony Competition in the Korean Battery Industry: Market Restructuring and Strategic Responses by 2025

The global battery market in 2025 is reaching an unprecedented inflection point. According to market research firm SNE Research, the global electric vehicle battery usage in the third quarter of this year increased by 23.8% compared to the same period last year, reaching 219.5 GWh. Of this, the combined market share of Korea’s top three battery companies (LG Energy Solution, SK On, Samsung SDI) reached 30.2%, surpassing 30% for the first time. This ranks second after China’s CATL at 36.7%, indicating that Korea has emerged as a strong contender against China in the global battery hegemony competition. Notably, Korean companies are solidifying their position in the premium market based on technological superiority and quality competitiveness, successfully implementing differentiation strategies in high-value-added areas beyond mere volume competition.

The growth is significantly influenced by geopolitical factors such as the U.S. Inflation Reduction Act (IRA) and the European Union’s strengthened battery regulations. The IRA promotes supply chain diversification by restricting the use of Chinese battery materials, providing new opportunities for Korean companies. For instance, LG Energy Solution increased its battery cell production in the U.S. by 180% in the first half of 2025 compared to the previous year, securing a total production capacity of 70 GWh at its Holland, Michigan, and Ohio plants. This led to long-term supply contracts with major U.S. automakers like Tesla, GM, and Ford, establishing an annual revenue base of approximately $12 billion.

On the technological front, Korean battery companies are adopting differentiated approaches from Chinese competitors in developing next-generation battery technologies. LG Energy Solution’s NCMA (Nickel-Cobalt-Manganese-Aluminum) battery achieved an energy density of 280 Wh/kg, a 15% improvement over existing NCM batteries, and is considered a key technology for extending electric vehicle driving ranges to over 500 km. SK On has also achieved innovative results in lithium metal battery technology, investing $800 million annually in R&D to achieve an energy density of 400 Wh/kg by 2026. These technological investments contrast with China’s CATL, which focuses on price competitiveness in lithium iron phosphate (LFP) batteries, highlighting Korean companies’ focus on securing competitive advantages in premium technology areas.

Global Supply Chain Restructuring and Strategic Partnerships

The most notable change in the battery industry in 2025 is the rapid restructuring of supply chains. Amid global policies to reduce dependence on China, Korean companies are pursuing supply chain diversification from raw material procurement to finished product production. Samsung SDI expanded the production capacity of its Hungary Göd plant from 10 GWh to 30 GWh, strengthening partnerships with European premium car brands such as BMW, Stellantis, and Volvo. The long-term supply contract with BMW, totaling $20 billion by 2030, is a key pillar of Samsung SDI’s European market entry strategy.

In terms of raw material acquisition, Korean companies are making strategic moves. SK On signed a 10-year contract with Canadian mining company Sigma Lithium for an annual supply of 30,000 tons of lithium, valued at approximately $1.5 billion. LG Energy Solution also secured an annual supply of 150,000 tons of lithium raw material through a spodumene concentrate supply contract with Australia’s Pilbara Minerals. This upstream integration strategy reduces dependence on China’s lithium processing market and mitigates price volatility. Even with lithium prices falling 40% compared to 2024, the average operating profit margin of Korea’s top three battery companies remains at 8.2%, demonstrating successful cost competitiveness.

Localization strategies in the North American market are also accelerating. Ultium Cells, a joint venture between LG Energy Solution and GM, operates three plants in Ohio, Tennessee, and Michigan, securing an annual production capacity of 140 GWh. This supplies GM’s electric vehicle lineup, including the Cadillac Lyriq and Chevrolet Bolt EUV, and is expected to generate approximately $18 billion in revenue in 2025. SK On is also constructing battery plants in Kentucky and Tennessee through its joint venture with Ford, BlueOval SK, with an annual production capacity of 60 GWh upon completion in 2026. These localization investments not only meet the requirements of the IRA but also offer strategic advantages such as reduced transportation costs and closer collaboration with customers.

Chinese battery companies’ response strategies are also noteworthy. CATL continues aggressive market expansion based on price competitiveness, focusing on increasing market share in Southeast Asia and South America. BYD is strengthening competitiveness across all areas from batteries to electric vehicle finished products through a vertical integration strategy, surpassing Tesla to become the global leader in electric vehicle sales in the third quarter of 2025. In response to these moves by Chinese companies, Korean companies are concentrating more on differentiation strategies based on technological innovation and quality superiority.

Next-Generation Technology Competition and Market Outlook

The evolution of battery technology is accelerating in 2025. In the competition to develop solid-state batteries, Korean companies are engaged in fierce technological competition with Japan’s Toyota and China’s CATL. Samsung SDI launched a pilot line for solid-state batteries earlier this year, focusing on achieving an energy density of 500 Wh/kg and a charging time of less than 10 minutes. This represents more than twice the performance of existing lithium-ion batteries and is expected to be a game-changer in the electric vehicle market. Commercialization is scheduled for 2027, with limited production initially targeting the premium electric vehicle market.

Korean companies are also achieving remarkable results in the field of material technology innovation. LG Energy Solution, the battery materials division of LG Chem, made groundbreaking progress in silicon nanowire anode technology. This technology increases capacity by more than three times compared to existing graphite anodes while ensuring a charge-discharge lifespan of over 1,000 cycles. Commercialization is planned for the second half of 2026, with Tesla and BMW being considered as major customers. SK Innovation is also making progress in developing solid electrolytes for lithium metal batteries, achieving an ion conductivity level of 10 mS/cm, similar to existing liquid electrolytes.

Recycling technology is also emerging as a new growth driver in the battery industry. The European Union’s battery regulation, effective from 2024, mandates that recycled materials account for at least 6% nickel, 16% cobalt, and 6% lithium in batteries by 2030. In response, LG Energy Solution is building a battery recycling plant in Poland in partnership with China’s Huayou Cobalt, with an annual capacity to process 10,000 tons of used batteries. The recovered nickel, cobalt, and lithium will be reused in new battery production, potentially reducing raw material procurement costs by 15-20%.

Growth in the energy storage system (ESS) market is also noteworthy. Due to the spread of renewable energy and increased demand for grid stability, the global ESS market grew to approximately 150 GWh in 2025, a 35% increase from the previous year. Samsung SDI secured a 2 GWh large-scale ESS project in Texas, USA, the largest single project to date. LG Energy Solution is also supplying batteries for a 300 MW/450 MWh ESS project in Victoria, Australia, strengthening its presence in the Asia-Pacific ESS market. The growth of the ESS market presents new opportunities for Korean companies to develop new technologies and expand their market, given the different technical requirements (longevity, safety) compared to electric vehicle batteries.

Investment and funding activities are also actively continuing. SK On raised $8 billion through a Nasdaq listing in the U.S. in October this year, the largest public offering by an Asian company in 2025. The funds raised will be focused on expanding North American production capacity and developing next-generation battery technologies. LG Energy Solution also raised $5 billion through the issuance of green bonds, which will be used for the development of eco-friendly battery technologies and the expansion of renewable energy use. These large-scale investments demonstrate that Korean battery companies are committed to building a foundation for long-term growth and securing competitive advantages through technological innovation.

In summary, the global battery market is expected to continue growing at an annual rate of over 20% until 2030, with the market size expected to exceed $400 billion. During this process, Korean companies are expected to further narrow the gap with China based on technological innovation and global partnerships. Particularly in the premium electric vehicle and ESS markets, strategies to secure both profitability and technological prowess beyond mere market share competition are expected to succeed. However, aggressive price competition from China, raw material price volatility, and the emergence of new competitors remain major risk factors, necessitating continuous innovation and strategic responses.

This analysis is based on publicly available market data and industry reports and should not be used as a basis for investment decisions. Market conditions and company performance can change rapidly, so please check for the latest information.