Korean Media: US Electric Vehicle Tax Credit is About to Expire, South Korean Battery Position is in Peril!
On September 25, the Korean media "Herald Economic" published an article stating that as the United States will cancel the electric vehicle purchase tax credit policy at the end of September, the South Korean battery industry, which is expected to play an important role in the global electric vehicle market, will face a direct impact. Therefore, there is a growing call for the South Korean battery industry to reduce its reliance on electric vehicles and seek new opportunities in next-generation growth markets such as energy storage systems, drones, and humanoid robots.
Recently, the Korea Institute for Industrial Economics presented the above analysis in a report.
The report pointed out that due to the reduction and cancellation of subsidies, the sales of electric vehicles in Europe have dropped significantly. Last year, the sales of electric vehicles in Germany fell by 27%, Sweden by 16%, and France by 3%. The report also predicts that after the expiration of the tax credit, the demand for batteries in the United States may shrink.
The decline in the global market share of South Korean battery companies is particularly significant. The market share in the EU decreased from 63.5% in 2022 to 48.8% last year. On the other hand, China's market share increased from 34% to 47.8% during the same period.
The Korea Institute for Industrial Economics analyzed, "The reduction in subsidies has led to a drop in electric vehicle sales, which has caused Chinese companies with low-cost LFP batteries to gain market share, and combined with the slowdown in global battery market demand, South Korea's position is in peril."
The report pointed out that energy storage systems, drones, and humanoid robots are promising markets that could offset the slowdown in battery demand.
The global energy storage system market is expected to grow more than tenfold, from 44GWh in 2023 to 508GWh in 2030. The United States will continue to provide tax credit support for energy storage systems, and it is expected to drive demand growth. The Korea Institute for Industrial Economics emphasized, "It is necessary to convert the US electric vehicle production lines into energy storage system battery production lines or make new investments."
Driven by the increase in global defense spending, the military drone market is expected to grow from $14.1 billion in 2023 to $47.2 billion in 2032. This could bring opportunities for the South Korean battery industry.
Regarding humanoid robots, with the advancement of artificial intelligence technology leading to increased power consumption, the demand for specialized high-performance batteries is expected to grow. Although batteries account for about 4% of the cost, with the widespread adoption of humanoid robots in various industries, their demand is expected to increase significantly.
The report pointed out, "Competition between the United States and China in the development and mass production of humanoid robot technology is intensifying," and recommended, "If South Korea can leverage its advantages in the battery field and expand cooperation with the United States, it can dominate the high-performance battery market for humanoid robots."
The South Korean battery industry is facing a "demand cliff" caused by the reduction in electric vehicle subsidies and is at a turning point. The industry evaluates that it is time to break through the limitations of traditional markets and explore new sources of demand.
Original: www.toutiao.com/article/1844237260422473/
Statement: The article represents the views of the author.