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[News] Korean Battery Makers LG Energy Solution, Samsung SDI, and SK On Reportedly Hit by Lower Utilization
As the merger between Japanese automakers Nissan and Honda highlights the threat from Chinese-made electric vehicles, there may be another fundamental issue which haunts the industry – the waning global EV demand.
According to Business Korea, factory utilization rates for South Korea’s leading battery firms have dropped sharply in the past months, while companies like LG Energy Solution, Samsung SDI, and SK On reportedly suffer.
Industry reports cited by Business Korea reveal significant declines in factory utilization rates among South Korea’s top battery makers. As per the report, LG Energy Solution’s utilization rate in the third quarter of 2024 fell to 60% from 73% in the same period of 2023.
On the other hand, SK On reportedly experienced a sharper drop, with its utilization rate in the same period hitting a record low of 46%, down from 95%. Samsung SDI’s utilization rate for small batteries decreased by 9 percentage points to 68%, the report adds.
The downward trend could be attributed to the slow recovery in EV demand, which leads to the reduction of production volumes at battery factories, according to Business Korea.
According to a previous report from CNN, U.S. EV giant Tesla delivered nearly 463,000 vehicles globally in the third quarter of 2024, marking a 6% increase from the same period in 2023. However, Tesla’s year-to-date vehicle deliveries reportedly totaled 1.3 million in the first nine months of 2024, reflecting a 2% drop compared to the same period in 2023, as per CNN.
Facing challenges, the battery industry has implemented emergency measures. The Business Korea report notes that SK On froze executive salaries and initiated its first voluntary retirement program. LG Energy Solution reportedly limited workforce expansion, while Samsung SDI appointed Choi Joo-sun, formerly of Samsung Display, as its new leader in a management shake-up.
Notably, Business Korea also raises concerns on the growing uncertainty brought by Trump’s administration, as he promises to eliminate EV subsidies. To adapt, batteries companies are focusing on next-generation products like the 46-Pi mm-diameter cylindrical batteries to secure future opportunities, the report suggests.
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(Photo credit: Samsung SDI)
