The South Korean government announced it would provide KRW38trn (US$29bn) in financing support over the next five years to the country’s rechargeable battery in industry to reduce its dependence on China.
The Ministry of Economy and Finance said, from 2024, it would provide financial support to improve the competitiveness of the country’s battery industry to help nurture new technologies and to strengthen the supply chain including overseas resource development, refining and the establishment of a battery recycling ecosystem. It also planned to help increase access to reserves of minerals used in battery production.
Support would be provided in the form of cheap loans and also insurance benefits for overseas investments including those related to the US Inflation Reduction Act (IRA). Companies would also receive tax credits for their investment in overseas resource development.
South Korea already has three leading electric vehicle (EV) battery manufacturers, LG Energy Solution, SK On and Samsung SDI, as well as smaller niche players. It also has strong global battery materials suppliers including Posco, SK Chem, EcoPro BM, Lotte Chemical and LG Chem.
The government also said it would increase state owned inventory of lithium and other critical minerals as insurance against a supply crunch. A new KRW240bn facility would be built in the Saemangeum industry complex by 2026 to increase storage capacity.
