South Korea has today announced a 38 trillion won ($29bn) financial package for its battery sector over the next five years, in a bid to boost the sector's competitiveness.
The country will enlist the help of several major South Korean banks to do so, such as Korea Development Bank, Export-Import Bank of Korea and the Industrial Bank of Korea, according to South Korea's trade, industry and energy ministry. Financial support including loans, credit guarantees as well as tax support will be provided to companies in the battery industry.
The country also plans to set up a W1.17 trillion fund to promote the industry, while investing W73.6bn in relevant research and development projects. It is also planning to work on legislation that will foster an industrial ecosystem for the recycling of eligible used batteries into products.
Top South Korean battery firms LG Energy Solution, SK On and Samsung SDI accounted for 48.4pc of global battery installations excluding China in January-October, data from South Korean market intelligence firm SNE Research show. But this still marked a 5.4 percentage point decline compared to the previous year, while China's largest battery manufacturer Contemporary Amperex Technology (CATL) raised its market share by around 5.9 percentage points to 27.6pc.
The US' release of its Inflation Reduction Act's guidelines on foreign entity of concern (FEOC) standards this month prompted concerns among South Korea's battery stakeholders. Korea's International Trade Association warned that extra costs may be incurred by South Korean firms collaborating with Chinese firms, owing to FEOC risks and adjustment in stakeholding ratios.
But the Korea Battery Industry Association on 4 December said the country's position is unlikely to be shaken by the IRA and it does not expect the impact to be significant.
