Where Is the Real Battleground for Korean Batteries in 2027? | Kim Hyun-soo, Research Fellow, Corporate Analysis Division, Hana Securities Research Center [Global Interview]
- What to look for
- You can learn why ESS differs from EVs in its battery performance requirements and demand conditions, understand its connection to data center electricity demand, and identify where Korean companies’ growth rationale depends not only on technology but also on policy and cost structures.
- Why it matters
- This helps distinguish sales volumes, prices, policy subsidies, and margins excluding subsidies when comparing battery companies, and examine the conditions under which capacity expansion translates into actual profits and the differences in material companies’ strategies.
AI summary
The interview explains how the growth drivers of South Korea’s battery industry are expanding from EVs to ESS, along with the policy and profitability conditions involved. The speaker sees limited growth prospects for EVs in the United States because of larger vehicle sizes, fuel prices, and changes in subsidies, but believes that Europe’s different total cost of ownership environment and local sourcing policies could be factors. The speaker explains that ESS has become important not only for addressing the intermittency of renewable power generation but also for buffering fluctuations in on-site generation and electricity demand at data centers, while distinguishing expanded use of existing power grids as an additional possibility that remains difficult to quantify. The speaker presents LFP’s lifespan and cost characteristics, together with the United States’ emphasis on supply chain security, tariffs, and tax credits, as the rationale for Korean companies’ market entry, while noting limits to their price competitiveness in markets without policy support. The speaker emphasizes that battery cells have a high proportion of variable costs, making it difficult for revenue growth alone to substantially expand margins, and that initial LFP production costs and the performance of system integration businesses need to be assessed separately. For cathode materials, the speaker expresses the view that the sector has passed its bottom because selling-price declines and inventory losses caused by the sharp drop in metal prices have eased, but long-term demand expectations need to be distinguished from a near-term earnings recovery. The interview compares L&F’s expansion of LFP volumes with EcoPro’s strategies for ternary batteries and raw materials, and identifies the pace of margin improvement in ESS businesses and material suppliers’ high valuations as major investment risks. All directional outlooks are the speaker’s conditional judgments, not definitive predictions of short-term prices.