Could EV industry downturn come as blessing in disguise for battery makers?

Readjustments to global carmakers' electrification strategies in the wake of decelerating electric vehicle (EVs) demand globally present an opportunity for Korean battery makers to realign their plans and develop new technologies, according to industry officials, Friday.

Announcing its goal of turning a profit in the fourth quarter, SK On told investors during a conference call on its third-quarter earnings that the softening EV demand will not hinder its earnings growth.

The battery manufacturing subsidiary of SK Innovation narrowed its operating loss to 86.1 billion won ($65 million) in the third quarter from 131.5 billion won in the second quarter and 344.7 billion won in the first quarter.

“Although the temporary slowdown in EV demand growth and the falling metal price will affect our battery business in the fourth quarter, we will continuously improve our profitability by enhancing the productivity of our overseas plants, cutting costs and enjoying benefits from the U.S. advanced manufacturing production credit (AMPC),” SK Innovation Chief Financial Officer (CFO) Kim Yang-seob said.

SK On CFO Kim Kyung-hun also expects limited impact from the slowing EV demand, saying that EV demand will remain solid in North America, although oversupply will be seen in the Chinese market by 2030.

“As we finished developing lithium iron phosphate (LFP) batteries, we are in talks with our clients about their supply,” he said.

SK On CEO Jee Dong-seob told reporters during the Battery Industry Day on Wednesday that the slower EV demand has enabled the company to prepare strategies for the future.

LG Energy Solution (LGES), which saw a 40 percent year-on-year increase in its third-quarter operating profit to 731.2 billion won, acknowledged during its conference call on Oct. 25, that EV demand will decrease next year, slowing down the company’s sales growth.

LGES CEO Kwon Young-soo, however, remained optimistic about the future, saying that the recent downturn will enable the company to reflect on what it overlooked during the rapid growth.

The subsidiary of LG Chem seeks to capitalize on the current crisis for the development of LFP batteries for EVs, aiming to start mass production of batteries for budget EVs in 2026 at the latest.

Samsung SDI, which posted 411.8 billion won in operating profit from its battery business during the third quarter, down 15 percent year-on-year, said in its conference call on Oct. 26 that it is aware of concerns over the slowed growth of the EV industry.

Samsung SDI Executive Vice President Kim Jong-sung, however, emphasized that there is a dominant view that EV demand growth will remain stable in the medium to long run.

The company has also accelerated its efforts to develop next-generation batteries.

It unveiled a plan to start the mass production of LFP batteries for energy storage systems (ESS) in 2026, which is seen as a preparatory step for its production of LFP batteries for EVs. It also plans to start the mass production of solid-state batteries in 2027.