Domestic battery companies are successively pushing for internal restructuring as they face the electric vehicle (EV) “chasm” (a temporary demand stagnation) and pre-emptive restructuring pressure from the government. From optimizing their workforce through voluntary retirement, to large-scale corporate bond issuance and the sale of prime assets worth trillions of KRW, they appear to be deploying all available options to secure financial soundness.

According to the battery industry on the 23rd, Korea’s three major battery manufacturers—LG Energy Solution, Samsung SDI, and SK On—have recently announced a series of strong self-rescue measures.

On the 20th, SK On announced via an internal notice that it would implement a voluntary retirement program and unpaid leave for head office employees hired before 2025 with at least one year of service. As the slowdown in EV demand has prolonged and cumulative losses have widened, the company has resorted to the painful measure of workforce reduction.

Samsung SDI has opted to play the card of selling prime assets. In a disclosure on the 19th, it officially announced that it would sell its 15.2% stake in Samsung Display. As of the end of September last year, the stake’s book value alone exceeded KRW 10 trillion, making it a core asset, and the move is being interpreted as a pre-emptive decision to secure financial capacity.

LG Energy Solution has likewise moved to defend liquidity through external financing. On the 20th, LG Energy Solution submitted a securities registration statement to the Financial Supervisory Service for the issuance of KRW 400 billion in KRW-denominated corporate bonds, and it is understood that the company plans to increase the issue size to as much as KRW 800 billion depending on demand forecasts.

The immediate cause behind domestic battery makers’ wide-ranging self-rescue measures is deteriorating earnings driven by the EV chasm and the onslaught of low-priced Chinese batteries. In the fourth quarter of last year (October–December), the combined deficit of the three Korean battery makers reached KRW 862.8 billion. According to market research firm SNE Research, the combined global EV battery market share of the three Korean firms, excluding China, was 36.3% last year, down 7.4 percentage points from 2024 (43.7%).

The downsizing and withdrawal of EV businesses by global automakers has also acted as a negative factor. LG Energy Solution saw battery supply contracts worth approximately KRW 13.5 trillion signed with companies including Ford cancelled, while SK On effectively ended its joint venture structure as it decided to operate “BlueOval SK,” its joint venture with Ford, separately. Samsung SDI is likewise facing heightened crisis awareness as Stellantis is reportedly reviewing an exit from StarPlus Energy, their joint venture.

Industry observers view remarks made by Minister of Trade, Industry and Energy Kim Jeong-kwan at a meeting with battery companies early last month as having served as a “trigger” for the current restructuring moves. At the time, Minister Kim is said to have expressed the view that “given the current battery market environment and production volumes, there are doubts about the three-firm system,” and urged the companies to seriously consider whether the “three-firm system” can be maintained. The industry interpreted this as a government signal that, if independent survival proves difficult, high-intensity restructuring such as mergers and consolidations would be inevitable.

A battery industry official said, “The industry’s sense of crisis has reached a peak as deteriorating earnings due to the prolonged chasm are compounded by the government’s strong restructuring pressure,” and predicted, “For the time being, each company is expected to focus all its efforts not on expanding scale but on painful self-rescue efforts to strengthen fundamentals.”

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