Global market share lagging, prospects for overtaking on curves look dim, Korean media reflects on battery industry being surpassed by Chinese enterprises

【Special Correspondent Li Zhiyin, Global Times in South Korea】 The three-day 2026 Korea Battery Energy Storage Exhibition opened on Wednesday. According to Yonhap News Agency, nearly 670 companies from 14 countries including the United States, China, Australia, Germany, and Japan participated this year. The day before, market research firm SNE Research released the latest data showing that Korea’s long-dominant global power battery industry is facing a “stalling” crisis. Despite an overall positive industry outlook, three leading Korean battery companies—LG Energy Solution, SK On, and Samsung SDI—experienced double-digit declines in installed capacity. In contrast, Chinese battery companies continue to expand their market share. CATL remains the global leader with 45.2%, followed by BYD with 13.8%, with the combined share of these two surpassing that of Korea’s three companies. This has drawn widespread attention within the Korean industry.

Betting on the US Fails

Expanding the view to the global market including China, the competition gap between Korea and China in the battery industry becomes even more apparent. Another statistic from SNE Research shows that in January, the total global new energy vehicle (NEV) battery installed capacity reached 71.9 GWh, a 10.7% year-on-year increase. Among them, the combined market share of LG Energy Solution, SK On, and Samsung SDI was 12%, down 4.3 percentage points from the same period last year.

South Korean media generally point out that the sharp decline in US market demand is a key factor pressuring Korean battery performance. In January, US EV sales were about 86,000 units, a significant 30.2% decrease year-on-year. The Chosun Ilbo notes that behind this change is the termination of US EV-related subsidies under the Inflation Reduction Act (IRA) at the end of September 2025, directly leading to a continued decline in domestic EV sales and severely dragging down Korean battery companies’ installed capacity.

According to Korea’s Daily Economy, Korean companies have actively bet on the US market in recent years, deeply integrating with local automakers and investing heavily in factories. However, after subsidy reductions, this strategy’s risks have become apparent. The report states that LG Energy Solution, while maintaining some orders through Kia models, has been affected by sluggish sales of core partners like Cadillac, GM, and Ford, putting overall performance under pressure. SK On’s core partner, Ford’s all-electric F-150 Lightning pickup, has seen a sharp drop in sales, and with structural adjustments at its joint venture BlueOval SK, it faces dual operational difficulties. Samsung SDI has also been heavily impacted by declining sales of BMW, Audi, and other brands in the US, leading to a continuous decline in market position.

The Capacity Utilization Gap Between China and Korea

More noteworthy is the analysis by Yonhap News Agency, which states that as battery capacity and range requirements increase, industry competition is changing. Market demand has not collapsed; rather, the competitive landscape is being reshaped, and Korean companies have failed to keep pace with this transformation.

The Chosun Ilbo’s assessment is even more severe. All three major Korean battery companies are projected to be in loss for the entire 2025 year. Excluding approximately 2.64 trillion won in US manufacturing tax credits, their combined losses could reach about 4.269 trillion won. Huang Jingren, a research fellow at the Korea Institute for Industrial Economics and Trade, bluntly states that Korea’s battery industry “cannot simply be viewed as a temporary demand downturn but should be seen as entering a structural downturn phase.” Behind this judgment is the huge gap in capacity utilization rates between China and Korea. Korean giants operate at only about 50% capacity, while CATL and BYD operate at around 90%, highlighting a significant difference in market absorption capacity and operational efficiency.

Industry insiders in Korea generally believe that China’s rapid expansion of global market share in batteries is closely related to its advantages in lower costs, more flexible technological routes, and stable industrial policies. Choi Joon-ryong, chief analyst at Law Firm Korea, points out that Chinese companies are vigorously developing lower-cost lithium iron phosphate (LFP) batteries and are accelerating expansion into energy storage systems (ESS) and other fields. Meanwhile, Korean companies have long focused on ternary lithium (NCM) technology, lagging behind in developing and mass-producing LFP batteries. This technological divergence is reshaping the global battery industry’s competitive landscape. The Chosun Ilbo also notes that Korean companies face not only price, capacity, and market expansion pressures from Chinese firms but also systemic advantages that Chinese companies have built, making it increasingly difficult to catch up.

From Expansion to “Survival”

With ongoing performance pressures and shrinking global market share, Korean battery companies have shifted from aggressive “expansion” to passive “survival.” According to the Chosun Ilbo, SK On restarted voluntary retirement applications in Korea last month after two years, aiming to optimize internal personnel structure, and cut nearly 1,000 jobs at its Georgia plant in the US to reduce labor costs and ease operational pressure. Samsung SDI has improved its financial structure by selling its stake in Samsung Display, raising funds, and significantly reducing investments in non-core areas to focus resources on core businesses.

Currently, Samsung SDI plans to start mass production of all-solid-state batteries in 2027. Chinese companies are also increasing investments in next-generation technologies such as all-solid-state and sodium-ion batteries, making the technological leap Korea once hoped for increasingly difficult.

Korean industry insiders told the Global Times that the current challenges facing Korea’s battery industry are multi-faceted, involving market share, investment pace, policy environment, and technological routes, rather than a short-term crisis caused by a single factor. The advantages of Chinese battery companies are no longer limited to the domestic market but are being systematically transformed into overseas competitiveness through globalization, leveraging cost, capacity, and technological advantages. Although Korean companies still retain some technological accumulation and international customer bases, ongoing pressure in the US market, severely underutilized factory capacity, and limited domestic policy support are continuously eroding their former industry-leading position.

In response to these increasingly severe issues, industry voices in Korea are calling for the government to introduce stronger, more direct support policies to help battery companies overcome difficulties. Currently, the Korean government is studying the introduction of “domestic production promotion tax incentives,” offering corporate tax deductions for companies producing strategic technological products domestically. However, the overall industry remains cautious. Since the three major companies are generally in losses, the actual deductible tax amount is limited, making it difficult to significantly ease cash flow pressures. Industry stakeholders are more hopeful for direct cash rebates, short-term production subsidies, or low-interest financing to fundamentally improve business operations. SNE Research predicts that in the near future, Chinese battery companies’ global market share will continue to rise.