[Alpha Biz= Paul Lee] South Korea’s three major battery manufacturers—LG Energy Solution, Samsung SDI, and SK On—have seen their production utilization rates fall sharply to the 40–50% range in the first half of 2024, reflecting a slowdown in global electric vehicle (EV) demand often described as the “EV chasm.”



According to semi-annual reports released on August 15:

LG Energy Solution reported an average utilization rate of 51.3%, down from 73.6% in 2022 and 69.3% in 2023. Its total production capacity reached ₩20.18 trillion in H1 2024, but the rate has declined steadily for three consecutive years.



Samsung SDI saw its small battery production utilization fall to 44% in H1, down from 58% a year earlier. Analysts believe its core mid-to-large battery segment has likely experienced a similar drop.



SK On recorded a utilization rate of 52.2% in H1, up from 43.6% in 2023 but still far below 2022’s 87.7%. It produced 85.6 million cells in H1, compared with 121.5 million for all of 2023.



Debt levels remain high: LG Energy Solution’s borrowings rose to ₩20.86 trillion, up ₩5.47 trillion from the end of last year; SK On’s debt increased by ₩1.19 trillion to ₩16.79 trillion; while Samsung SDI trimmed its borrowings slightly to ₩11.42 trillion.



Despite falling utilization, the companies continue to invest in research and development to secure future growth. LG Energy Solution spent ₩620.4 billion on R&D in H1, representing 5.2% of sales—up from 4.2% last year. Samsung SDI allocated ₩704.4 billion (11.1% of sales), up from 7.8% a year ago. SK On spent ₩148 billion, down slightly from a year earlier, representing just 0.52% of sales.



Industry observers warn that the combination of underutilized capacity and mounting debt highlights the challenges Korea’s battery giants face, even as they double down on R&D to stay competitive in the global EV market.

 

 

 

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