SK On, LG Energy Solutions, and Samsung SDI, the three prominent South Korean battery makers are reportedly expected to see consistent growth in profitability and revenue over the coming years as they compete to meet the rising demand for secondary batteries to power EVs in the US.

As per Korea-based battery industry analyst SNE Research, the overall revenue of the three companies would increase by about five times from the $27 billion reported in 2021 to $121 billion by 2025. This equates to a 48% yearly growth rate beginning in 2021 and spanning five years.

By 2025, the three would have a profit margin of about 10%, apart from SK On. The SK affiliate, the only Korean battery manufacturer that is currently losing money, will break even by 2023 and will have a 5% profit margin by 2025.

Kenny Kim, SNE Research’s CEO, stated during the Korea Advanced Battery Conference 2022, that Samsung SDI and LG Energy Solution are headed for a steady rise in profit margin, while SK On is facing an issue in terms of profitability.

It is anticipated that cylindrical batteries with an 80% nickel composition, which are the most profitable form factor for Korean manufacturers, will lead to a 10% profit margin. In the meantime, pouch-type and prismatic batteries would stand at under 4%.

Korean battery manufacturers have an advantage over Chinese competitors, including the largest battery manufacturer in the world, CATL, since they are able to break into the US and European EV markets. Additionally, Korean battery manufacturers also enjoy advantageous positions as the US and Europe frequently partner with battery suppliers to build battery production facilities on their home turf.

Korean battery manufacturers have joined forces with the local carmakers in the US and European markets, owing to roadblocks and Chinese competition. It is estimated that together, they will hold a combined 55 percent market share by 2030, up from 39 percent in 2022.

Source credit: https://www.koreaherald.com/view.php?ud=20220920000630