Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Struggling battery makers bet on ESS, AI, cost cutting to power 2026 rebound
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By Park Jae-hyuk
Skepticism remains over industry's growth momentum
Korea's three major battery manufacturers began 2026 with renewed confidence in their ability to regain growth momentum, despite lingering skepticism about their earnings prospects amid sluggish global demand for electric vehicles (EVs).
Acknowledging a difficult business environment, the leaders of LG Energy Solution (LGES), Samsung SDI and SK On urged employees to overcome current challenges by diversifying portfolios, cutting costs, improving technology and adopting artificial intelligence (AI).
LGES and SK On both stressed the need to expand the production of batteries for energy storage systems (ESS), along with broader cost-saving efforts and the use of AI in daily operations.
“Demand for ESS is growing more sharply than ever before, and this is the crucial opportunity for the success of portfolio rebalancing,” LGES CEO Kim Dong-myung said in his New Year’s address Monday. “We will speed up converting our facilities in North America, Europe and China to produce ESS batteries, stabilizing their supply and streamlining operations.”
To reduce costs, Kim pointed to innovation in materials and processes, investments to secure raw materials and recycling used batteries. He also outlined plans to apply AI to factory operations and the development of products and materials, so productivity rises at least 30 percent by 2030.
“Although the market conditions are still tough, the year 2026 will be the first year that our efforts turn into tangible results,” he said.
In a joint New Year’s message Friday, SK On co-CEOs Lee Seok-hee and Lee Young-wook said the company will accelerate development of core technologies, intensify cost-cutting efforts and focus on winning new ESS orders.
“For these goals, we should speed up AI-based workflow changes aimed at faster, more accurate execution,” they said.
CEOs of Korea's three major battery manufacturers pose with Yang Hee-won, second from left, then-head of Hyundai Motor Group's R&D division, after signing an agreement to cooperate for safer battery technologies at the carmaker's R&D facility in Hwaseong, Gyeonggi Province, Aug. 22, 2025. From left are LG Energy Solution CEO Kim Dong-myung, Yang, Samsung SDI CEO Choi Joo-sun and SK On CEO Lee Seok-hee. Courtesy of Hyundai Motor Group
Samsung SDI CEO Choi Joo-sun, an engineer by training, said Friday that technology is the key to navigating the current situation.
“Despite the complex situations we're facing, if we secure technological competitiveness and move toward a supercycle in a united direction, I believe we will soon welcome a breathtaking future,” he said, invoking “pessimistic optimism,” which he defined as recognizing real-world risks and limitations, preparing thoroughly for the worst and still expecting positive outcomes.
Choi said 2026 must be a year of meaningful progress and outlined Samsung SDI’s own “3S” guiding principles — Select, Speed and Survival — to steer the company forward this year.
“There is nowhere to step back anymore. We must move forward now,” he said. “If we continue to hold the belief that technology is hope and communicate with open hearts, the breathtaking future we envision will soon become our reality.”
Still, market analysts remain unconvinced, citing repeated cancellations of battery supply deals with North American EV makers late last year. According to financial data provider FnGuide, all three battery manufacturers are estimated to have posted operating losses in the fourth quarter of last year.
“Due to a drastic decline in capacity utilization rates at U.S. factories, scrapping of inventories and conversion of production lines, LGES must have faced one-off costs,” NH Investment & Securities analyst Ju Min-woo said. “Samsung SDI’s earnings recovery will be limited due to sluggish EV sales.”