Korea Invests $12.5b In Li-ion Battery Sector

Edward Niedermeyer
by Edward Niedermeyer

With analysts already worrying about Lithium-ion battery oversupply in Japan and the US, the Korean government is shaking up the sector even more by announcing an investment of 15 trillion won ($12.5b) in the country’s battery sector. Called “Battery 2020 Project,” the money will be spent on building up Korean R&D capabilities, with the goal of improving the country’s ability to source Li-ion components. Korea currently imports many of the components needed for its domestic battery industry, and according to Yonhap, this investment will seek to develop Korean sources for up to 75 percent of the battery industry’s components by 2020. A government official explains:

South Korea’s Samsung SDI and LG Chem already control 38 percent of the market, but actual percentage of local parts and technology used to make these products stand at less than 20 percent

So what’s the problem? By 2015, EV battery supplies are projected to be somewhere in the range of 200 percent of overall market demand for EVs themselves. Though over-investment will help drive down the price of batteries, potentially improving demand for EVs, there’s little business sense underlying the environmentally-motivated rush to fund the Li-ion industry. And Korea is hardly the only country spending big bucks on the EV battery sector: The US has spent billions over the last several years in retooling loans for companies like Tesla and Fisker, as well as stimulus money and DOE grants to battery makers.

In fact, one of the firms receiving a healthy amount of US government support is the Korean firm LG Chem, which received about $150m in DOE grants to build its $300m Holland, MI plant. Indeed, President Obama is in Michigan today, touting his administration’s investment in firms like LG Chem. But, like the larger Detroit auto industry that Obama is so anxious to support, America’s battery industry is starting behind its Asian competition, and with this Korean investment, it will need more government money just to keep up. And when prices for Li-ions drops further, somebody is going to have to take a bath. The way things have been playing out for the last several years, it would come as no surprise to find out that the big loser here (again) was the American taxpayer.

Edward Niedermeyer
Edward Niedermeyer

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  • Blowfish Blowfish on Jul 14, 2010

    so where on Earth are these metals being mined? buying up the rights or mines could the smart thing, one can make -remake these batt but when u pay thru the nose for metals u are going to be screwed!

  • John Horner John Horner on Jul 15, 2010

    The Korean government spends billions making sure it gets a big piece of the next manufacturing pie. Meanwhile, back here in the US we can only seem to agree to spend money on wars.

    • Psarhjinian Psarhjinian on Jul 15, 2010

      Well, that's because governments spending money on anything but the military is socialism.

  • Arthur Dailey Good. Whatever upsets the Chinese government is fine with me. And yes they are probably monitoring this thread/site.
  • Jalop1991 WTO--the BBB of the international trade world.
  • Dukeisduke If this is really a supplier issue (Dana-Spicer? American Axle?), Kia should step up and say they're going to repair the vehicles (the electronic parking brake change is a temporary fix) and lean on or sue the supplier to force them to reimburse Kia Motors for the cost of the recall.Neglecting the shaft repairs are just going to make for some expensive repairs for the owners down the road.
  • MaintenanceCosts But we were all told that Joe Biden does whatever China commands him to!
  • Rick T. If we really cared that much about climate change, shouldn't we letting in as many EV's as possible as cheaply as possible?
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