The state gives incentives to private companies in the production of batteries for electric vehicles and they promise to increase investment
The South Korean government and the private companies of that country are committed to taking over the leadership in the race for the supply of batteries for electric vehicles (EV), at a time when the industry is looking for new low cost, reduced weight and faster charging solutions.
At a time in which there is an effort by European and North American car manufacturers to produce their own batteries and thus reduce dependence on the Asian market (South Korea, China and Japan are the largest producers of EV batteries in the world), the state and South Korea’s business fabric will unite to solidify the nation’s leadership in the rechargeable battery sector.
To support the private sector and foster growth, the Ministry of Commerce Korea, Industry and Energy announced a comprehensive industry support policy, called K-Battery, whose main objective is to foster collaboration between business and government to develop next-generation battery technology, expand local supply chains and create demand in various areas through tax incentives.
“If chips play the role of the brain, batteries can be seen as the heart that feeds the body,” said Industry Minister Moon Seung-wook during his visit to the LG Energy factory in Ochang, 120 kilometers south of Seoul. “The government will channel all its resources to stimulate the battery sector, as the main economic engine equivalent to the chip industry”, he added.
The battery manufacturers in South Korea, among which stand out LG Energy Solution Ltd., Samsung SDI Co. and SK Innovation Co. (with a third of the global EV battery market in the first five months of this year), as well as related companies, will receive up to 50% off in the tax on R&D expenses and a 20% cut in the tax on investments in facilities.
The target set by the South Korean state is to almost triple battery exports by 2030: from 7.5 billion dollars recorded in 2020 to 20 billion dollars. The top three companies in the sector are committed to investing a total of $35.3 billion over the next decade.
At the production level, the focus is on next-generation batteries, ie , the solid state. Compared to lithium ions, they allow you to store more energy in the same space and represent a lower risk of fire. However, they are still expensive, in particular due to initial development costs and the difficulty of mass production. The solid state battery market is estimated to grow to US$8 billion by 2031.
The South Korean government has also pledged to support raw material development projects in the and make diplomatic efforts to ensure a stable supply chain for battery manufacturing as a way to address potential supply shortages, while exploring ways to recover key metals, such as nickel and cobalt, from of used batteries.
