The domestic battery and material industry is delaying the planned completion dates of factories while seeking to reduce expenses. This is because the demand for electric vehicles, which is a front-end business, has not recovered, and there are no orders to meet the increased production capacity resulting from the expansion of facilities.
According to the industry on the 7th, Geumyang has pushed back the target completion date of its second battery factory in Gijang, Busan, for which it invested 610 billion won with a goal of December last year, to May of this year. The Gijang factory, which began construction in September 2023, plans to produce 2170 (diameter 21 mm, height 70 mm) and 4695 (diameter 46 mm, height 95 mm) cylindrical batteries in a total floor area of 124,479 square meters (about 37,655 pyeong). Upon completion, the production capacity is expected to reach 300 million cells annually, enough to equip 216,000 electric vehicles each year.
The Geumyang Gijang factory had been gradually introducing equipment after completing the exterior work at the end of August last year, but it is interpreted that the completion date was delayed due to insufficient workload. Geumyang announced its first battery order last month on the 4th by signing a supply contract for 2170 batteries (worth 81.2 billion won) with the U.S. corporation "NANO Tech Energy," and on the 8th of the same month, it signed a supply contract for 2170 batteries (worth 78.8 billion won) for 750 electric buses over five years with the domestic electric bus corporation P-Line Motors. However, even when combining the amounts of the two contracts, it only amounts to about a quarter of the investment in the Gijang factory.
Ecopro has postponed the completion date of its cathode material factory in Pohang, North Gyeongsang Province, from December last year to December 2026, which has been under construction since May 2023. Ecopro planned to produce NCMX (nickel, cobalt, manganese, and additives) and single crystal cathode materials classified as next-generation products there, but decided to make this move due to difficulties in securing sufficient orders.
Lotte Energy Materials, which produces copper foil for batteries, has postponed the completion of its factory in Catalonia, Spain, originally scheduled for the end of this year, to June 2027. The investment size for the Spanish factory, which was pushed forward targeting local European demand, was 560 billion won in total. However, by delaying the completion date, the investment amount executed in Spain last year also decreased from 180 billion won to 25 billion won.
POSCO FUTURE M, which has been suffering from a volume offensive of low-cost anode materials from China, has reduced the scale of its expansion investment for the synthetic graphite anode material factory in the Pohang Blue Valley Industrial Complex from an annual capacity of 18,000 tons (t) to 13,000 t. POSCO FUTURE M had planned to expand its anode material production capacity to 221,000 t by 2026 but has almost halved its target to 113,000 t. The operation rate of POSCO FUTURE M’s anode material factory, which reached 80 to 90% in 2020, was only about 30% last year.
According to SNE Research, the market share of the three Korean battery manufacturers in global electric vehicle battery usage from January to November last year was 19.8%, down 3.7 percentage points (P) from the same period the previous year. The domestic battery and material industry, which has fallen into demand dampening, is declaring emergency management and establishing strong self-rescue measures to overcome the recession. Lee Dong-chae, the former chairman of Ecopro, noted, "Now, if we cannot find a way, we are inevitably at a critical juncture of life and death," adding, "If we do not undergo a complete transformation in all institutional sectors of management, we cannot guarantee survival."
The outlook is optimistic that the industry will recover starting next year. Kim Dong-myung, CEO of LG Energy Solution, said, "The electric vehicle market will recover demand and maintain long-term growth as we reach price parity around 2026-2027 and alleviate concerns regarding driving range, charging, and safety."