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| President Moon Jae-in sits in an electric vehicle loaded with batteries from a local manufacturer, at an LG Energy Solution plant in Cheongju, North Chuncheong Province, Thursday. Yonhap |
Tax incentives, R&D support to get boost amid greater global competition
By Kim Bo-eun
President Moon Jae-in said Thursday that his government would use all available policy measures to ensure that South Korea becomes a global secondary battery-manufacturing powerhouse by 2030.
"Korea's goal is evident. Simply put, our country aim is to become a global battery-manufacturing powerhouse by 2030. South Korea has become the world's top battery-producing country in terms of market share in small-sized batteries by passing Japan in 2011. In the mid- and large-sized battery markets, the country is competing with China for the top position," Moon said at the start of a speech at the LG Energy Solution (LGES) battery manufacturing plant in Ochang, North Chungcheong Province, Thursday afternoon, according to Cheong Wa Dae press pool reports.
Moon was attending an event there marking the update of the country's battery strategy. "The government will truly back Korean companies' efforts to advance the K-battery strategy. The global battery market has doubled over the last five years and by 2025, the market is expected to surpass the memory semiconductor market. By 2030, the battery market is estimated to be worth $350 billion. This is a huge opportunity and simultaneously a challenge," Moon said, according to the reports.
Attending the event were top executives from LGES, Samsung SDI and SK Innovation (SKI) and senior government officials. "By 2030, LGES, Samsung SDI and SKI will invest more than 40 trillion won into small- and medium-sized enterprises (SMEs). I appreciate your courageous efforts and show my respect to you," the President said.
Moon also vowed to introduce large-scale tax incentives for investments in research and development at a time securing high-tech parts is considered on a par with national security amid ongoing geopolitical tension. He added the government has determined that batteries are a core technology alongside semiconductors and vaccines, and so will offer a maximum tax credit of 20 percent for investments into equipment, and tax credits of up to 50 percent for R&D spending.
"The development of battery technology, which will become central to future means of mobility including electric vehicles, is a core driver that will transition Korea's economy into a leading one," Moon said.
"South Korea aims to commercialize lithium-sulfur batteries by 2025, solid-state batteries by 2027, and lithium-metal batteries by 2028. We will invest at least 500 billion won to actualize large-scale research and development projects, and plan to create a next-generation battery park where research, testing and personnel training will take place."
Thursday's updated policy on secondary battery investment is the second such one after the President unveiled a similar package for semiconductors in May, given these have become key sources of competitiveness for major economies.
Battery technology and production have become a core asset in achieving carbon neutrality, a common goal of governments worldwide as they seek to better protect the environment. U.S. and major economies in Europe are rushing to strengthen their local supply chains as a means to secure a stable supply as the market for clean vehicles continues to grow. And some have sought to attract Korean battery manufacturers to build plants in their country.
Korean companies have rapidly scaled up their competitiveness in the battery industry. LGES is competing with China's CATL for the top spot in the global EV battery market. CATL accounted for 32.5 percent of the market, followed by LGES with 21.5 percent in the first quarter of 2021, according to SNE Research, with Samsung SDI and SKI ranking fifth and sixth, respectively.
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