The venue of “InterBattery 2025,” showcasing next-generation battery technologies. (Yonhap)
SEOUL, Oct. 20 (Korea Bizwire) — South Korea’s battery sector has roared back to life this month, rebounding sharply from months of stagnation tied to electric vehicle (EV) demand concerns. The rally has sent related exchange-traded funds (ETFs) soaring, though analysts caution that the upswing may be short-lived.
According to data from the Korea Exchange as of October 17, the top-performing ETF in the domestic market so far this month is KODEX Secondary Battery Industry Leverage, which has surged 51.4 percent. The fund doubles the daily returns of an index tracking major Korean battery makers, magnifying gains as stocks rally.
Other battery-linked ETFs also ranked among the market’s best performers: TIGER Secondary Battery TOP10 Leverage rose 41.3 percent, TIGER Secondary Battery Materials Fn gained 32.9 percent, and BNK Secondary Battery Cathode Materials climbed 31.1 percent. These figures mark a dramatic turnaround from September, when the same funds were among the market’s biggest losers.
The rebound comes as global EV sales hit a record high in September, easing investor anxiety over a potential demand plateau. Optimism has also been fueled by expectations that booming investments in artificial intelligence will drive up demand for energy storage systems (ESS), seen as a new growth driver for battery makers.
Adding momentum, LG Energy Solution reported stronger-than-expected third-quarter earnings on October 13, while speculation grew that U.S. trade restrictions on Chinese batteries could benefit Korean manufacturers.
“The recent rally reflects revived expectations for the ESS market and steady EV demand in Europe,” said Lee Yong-wook, an analyst at Hanwha Investment & Securities. “China’s tighter export controls on battery materials and technology may further strengthen the position of Korean firms.”
A visitor examines an electric vehicle equipped with prismatic batteries at Samsung SDI’s booth during InterBattery 2025, held at COEX in Seoul’s Gangnam District on March 5, 2025. (Yonhap)
After Months of Lull, Battery Shares Surge on Renewed Global Demand Hopes
The KRX Secondary Battery Top 10 Index, which tracks ten major players including LG Energy Solution and Ecopro, jumped 19.4 percent this month, outpacing the Kospi’s 9.5 percent gain. The combined market capitalization of those ten firms reached 241.2 trillion won ($176 billion), up nearly 47 trillion won from the end of September.
Still, market experts warn that investor expectations may have run too far ahead of fundamentals. Some note that the recent surge in U.S. EV sales — up 35 percent from a year earlier — was likely driven by pre-orders ahead of the expiration of federal subsidies.
“Consensus profit forecasts appear overly optimistic,” said Kim Hyun-soo of Hana Securities. “Investors are expecting over 70 percent earnings growth next year on top of just 10 percent revenue expansion — a level that’s difficult to sustain.”
He added that while short-term trading opportunities may remain, the sector could face downward revisions in earnings forecasts once one-off gains, such as inventory adjustments, fade.
Visitors look around LG Energy Solution’s booth at InterBattery 2025, held at COEX in Seoul’s Gangnam District on March 5. (Yonhap)
Analysts also caution that the ESS boom may not lift all parts of the supply chain equally. “The ESS market is likely to expand around lithium iron phosphate (LFP)-based systems, an area where Korean cathode makers have limited exposure,” Lee noted. “Most domestic producers still rely on nickel-cobalt-manganese (NCM) materials, which could limit their direct gains.”
For now, the battery rally has reenergized a sector that had languished under the weight of subsidy cuts and soft demand. But as one analyst put it, “Whether this becomes a lasting trend or just another spark depends on what happens after the subsidies — and the hype — fade.”
Ashley Song (ashley@koreabizwire.com)
