South Korea to invest $29 billion in battery industry across the next five years

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South Korea to invest $29 billion in battery industry across the next five years
South Korea to invest $29 billion in battery industry across the next five years

As global competition to secure battery supply chains intensifies, South Korea will invest 38 trillion won ($29 billion) over the next five years to improve its battery industry

South Korea will invest 38 trillion won ($29 billion) over the next five years to enhance its battery industry as global competition to secure battery supply chains continues to toughen, the government announced on Wednesday.

According to a joint statement from a number of ministries, South Korean battery manufacturers such as LG Energy Solution, Samsung SDI, and SK On, a unit of SK Innovation, held a 49% share of the worldwide battery market, excluding China, as of 2022.

However, their reliance on foreign countries for essential minerals made diversification critical, according to the report.

The country intends to provide tax breaks and financing assistance to South Korean corporations investing overseas to secure mining rights for minerals and other battery materials, as well as boost financial support for companies that purify and reuse batteries.

It also intends to boost financial assistance, such as loans, guarantees, and insurance, from institutions such as the Export-Import Bank of Korea to battery sector enterprises, especially those investing in North America, in order to meet the terms of the US Inflation Reduction Act (IRA).

South Korean battery companies have lowered their sales forecasts for 2024 as electric vehicle sales stagnate, owing in part to an increase in consumer auto finance prices.

The announced steps, on the other hand, aimed to boost the country’s secondary battery industry’s competitiveness to the highest in the world in the long run, according to the statement.

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