Korea's battery makers boost R&D spending amid low factory utilization rates, market challenges from China
Published: 18 Aug. 2025, 15:23
Updated: 18 Aug. 2025, 16:17
Audio report: written by reporters, read by AI
![LG Energy Solution's booth at the InterBattery Europe 2025 exhibition held in Munich, Germany, on May 6. [NEWS1]](https://koreaseafood.online/data/photo/2025/08/18/618fd8b0-45c2-4703-a551-62338b877daf.jpg)
LG Energy Solution's booth at the InterBattery Europe 2025 exhibition held in Munich, Germany, on May 6. [NEWS1]
Korea’s three major battery makers are seeing factory utilization rates hit bottom amid a prolonged industry downturn. Still, the companies have increased research and development (R&D) spending in a bid to secure next-generation battery technologies and gain an edge over Chinese competitors.
LG Energy Solution’s average factory utilization rate in the first half of this year stood at 51.3 percent, according to the company’s semiannual report released Thursday. That figure has steadily declined, from 73.6 percent in 2022 to 69.3 percent in 2023, and to 57.8 percent last year.
Samsung SDI and SK On also operated their factories at only about half capacity in the first half of this year, with utilization rates of 44 percent and 52.2 percent, respectively. Samsung SDI’s figure applies only to small batteries, as the company does not disclose rates for mid- to large-sized cells used in electric vehicles.
The decline has been attributed to sluggish recovery in EV demand and intensified competition from Chinese battery makers. The combined global market share of Korea’s three battery makers for EV batteries fell to 16.4 percent in the first half, down 5.4 percentage points from the same period last year, according to SNE Research.
Running production facilities below full capacity drives up fixed costs and hurts profitability.
Nevertheless, the companies are ramping up investment in future technology. LG Energy Solution spent 620.4 billion won ($448.4 million) on R&D in the first half of this year, its highest figure since the company was launched at the end of 2020. The manufacturer spent 3.1 percent of its revenue in R&D in 2023, which rose to 4.2 percent in 2024 and 5.2 percent during the first half of this year.
Samsung SDI, which aims to mass-produce solid-state batteries by 2027, spent 704.4 billion won in the first half of 2025, up from 693.3 billion won a year earlier. At 11.1 percent of sales, it had the highest R&D intensity among the three biggest Korean battery makers. SK On invested 148 billion won during the same period, similar to the 148.5 billion won it spent in the same period last year.
![Samsung SDI's booth at the InterBattery Europe 2025 exhibition held in Munich, Germany, on May 6. [SAMSUNG SDI]](https://koreaseafood.online/data/photo/2025/08/18/58b90881-9bf2-42d4-8644-1fb218a00c09.jpg)
Samsung SDI's booth at the InterBattery Europe 2025 exhibition held in Munich, Germany, on May 6. [SAMSUNG SDI]
Industry watchers say the companies are betting on technological strength to survive what they describe as a temporary stall in demand known in the industry as a “chasm.”
While they are currently diversifying portfolios by expanding mid- to low-priced products to counter cheap Chinese batteries and developing energy storage systems (ESS), the ultimate battleground will be next-generation technologies.
Given that Chinese firms, backed by government support, are investing heavily in R&D, Korean companies need to maximize their research capabilities. Chinese company CATL’s R&D spending surpasses the combined investment of the three Korean firms.
CATL spent 10.1 billion yuan ($1.41 billion) in R&D in the first half of this year, up 17.5 percent from a year earlier, compared to the Korean trio’s total of 1.47 trillion won.
![SK On's R&D researchers are seen at the company's Future Technology Institute in Daejeon in this photo provided by the company [SK ON]](https://koreaseafood.online/data/photo/2025/08/18/545bc1b2-c4de-495d-a02d-397cf2764ce6.jpg)
SK On's R&D researchers are seen at the company's Future Technology Institute in Daejeon in this photo provided by the company [SK ON]
The companies are also reorganizing their R&D structures. On Aug. 1, SK On renamed its Daejeon-based “Battery Research Institute” to the “Future Technology Institute” to accelerate its push for next-generation technology.
LG Energy Solution transferred its Future Technology Center, which had been under CEO Kim Dong-myung, to the chief technology officer (CTO) to strengthen expertise and consolidate research capabilities.
Samsung SDI renamed its CEO-level “Process and Equipment R&D Center” the “Samsung Future Technology Campus” as part of its effort to speed up development of solid-state and other advanced batteries.
“EV demand remains sluggish, but with global competition in technology intensifying, it is crucial to focus on development now to prepare for the period after the chasm,” an industry official said. “All three Korean battery makers are betting everything on being the first to commercialize next-generation technologies such as solid-state and semi-solid batteries and dry electrode processes.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY CHOI SUN-EUL [[email protected]]
with the Korea JoongAng Daily
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