South Korea will provide 38 trillion won ($29 billion) in financing to strengthen its battery industry over the next five years, as global competition to secure battery supply chains remains fierce, the government said on Wednesday.
South Korean battery firms like LG Energy Solution, Samsung SDI and SK On, a unit of SK Innovation, held a 49 per cent share of the global battery market excluding China as of 2022, the joint statement from a number of ministries said.
But their dependence on foreign countries for key materials made diversification crucial, it added.
The country plans tax incentives and loan support for South Korean firms investing overseas to secure mining rights for minerals and other battery materials, and strengthen financial support for companies that refine and reuse minerals.
It also plans to increase financial support such as loans, guarantees and insurance from institutions like the Export-Import Bank of Korea to battery industry firms, including those investing in North America to meet the terms for tax allowances under of the U.S. Inflation Reduction Act (IRA).
South Korean battery firms have tempered their 2024 sales outlooks as electric vehicle sales slow, partly due to a spike in auto financing costs for consumers.
The announced measures, however, sought to strengthen the country’s secondary battery industry’s competitiveness to the highest in the world in the long-term, the statement said.