The global battery market is currently navigating a ‘chasm’, a concept introduced by business consultant Geoffrey Moore. (Image courtesy of Yonhap)
SEOUL, Feb. 13 (Korea Bizwire) – The global battery market is currently navigating a ‘chasm’, a concept introduced by business consultant Geoffrey Moore, which represents a temporary stagnation or decline in demand as cutting-edge technology products transition from early adopters to mainstream markets.
This situation is exacerbated by high global interest rates, reductions in electric vehicle (EV) subsidies, and a lack of charging infrastructure.
Despite these challenges, the battery industry remains optimistic, adopting a ‘low-high’ outlook for the future, driven by the inevitable shift towards electric vehicles.
Recent projections by Bloomberg New Energy Finance (BNEF) estimate a 21% growth in the global EV market this year compared to last, with pure electric vehicles expected to account for 70% of the estimated 16.7 million EV sales.
Major market research firms forecast the EV battery market to grow at an annual rate of over 20%, reaching a volume of approximately 2.3 to 3.9 terawatt-hours (TWh) by 2030.
This growth is supported by various countries’ carbon reduction policies and automakers’ electrification strategies, despite the current slowdown in the EV market.
Industry insiders view the ‘chasm’ phenomenon as indicative of the inevitable mass adoption of EVs, suggesting that the current slowdown is temporary.
They remain confident that the exit from this tunnel is clearly in sight, with recovery expected as external factors such as interest rates stabilize.
SK On’s CFO, Kim Kyung-hun, expressed during a Q4 earnings call that the overall business environment this year is uncertain due to macroeconomic factors.
However, he anticipates a recovery in shipments and performance improvement in the latter half of the year, thanks to expected interest rate declines and an expanded lineup of new EVs.
The top three South Korean battery manufacturers already surpassed a cumulative order backlog of 1,000 trillion won last year. LG Energy Solution expanded its order backlog to over 500 trillion won in October last year through new orders from Hyundai’s North American joint venture, Toyota, Honda, and others. SK On also reported that its cumulative order backlog had increased by 110 trillion won from the end of 2020 to over 400 trillion won by the end of last year.
The transition to electric vehicles is accelerating, with Genesis announcing a complete electrification strategy by 2030, bypassing hybrid models and moving directly from internal combustion engines to pure electric vehicles.
The top three South Korean battery manufacturers already surpassed a cumulative order backlog of 1,000 trillion won last year. (Image courtesy of Yonhap)
Peugeot has declared its lineup will be fully electric by the end of this year, launching models like the E-408 and E-5008 SUV to complete a lineup of 12 electric vehicle models.
Honda showcased its next-generation electric vehicle lineup earlier this year, with plans to launch 30 electric vehicle models by 2030. The company is also considering investing 18 trillion won to build an electric vehicle factory in Ontario, Canada.
Toyota is expanding its electric vehicle production line at its Kentucky plant in the United States and is constructing a battery factory in North Carolina with an investment of 18 trillion won. Nissan is investing 5 trillion won to expand electric vehicle production facilities at its Sunderland plant in the U.K.
According to SNE Research, the total battery capacity installed in electric vehicles (pure electric, plug-in hybrids, and hybrids) registered worldwide last year increased by 38.6% year-over-year to 705.5 gigawatt-hours (GWh).
An industry representative emphasized the intrinsic future growth potential of the battery industry, stating, “The essence of the battery industry is its growth potential. The initial investment burden notwithstanding, the industry’s commitment to business is driven by the conviction that with solid technology and manufacturing capabilities, it can lead the global market in the medium to long term.”
Kevin Lee (kevinlee@koreabizwire.com)
