Industry Value Chain

Korean Producers Implementing Strategies to Turn Around Squeezed Profits Survival Hinges on Diversification and Cost Reduction Korean battery value chain companies, having relied on the US as a captive market largely protected from Chinese competition, have been been facing growing financial pressure from:

Rising costs driven by US tariffs Repeal of the US EV tax credit 30D) and tighter restrictions on the battery production tax credit 45X Slower EV demand and battery orders in US

Their main survival strategies have involved:

Diversifying into LFP and BESS, capturing the booming demand for both, while capitalising on the USChina divide that is prompting demand for China-free supply. Upstream integration for lower raw material costs to improve margins and reduce reliance on third-party suppliers.

Efforts are already paying off, with improved profitability seen in 2025 Q3 filings, and a couple of companies growing a large order backlog for ESS products. Remaining firms struggling with profitability have yet to fully carry out their plans. However, pressures on US EV demand remain a reality, and both Korean companies and their automaker customers claim they still have more to do in terms of recalibrating their investments in the NMC value chain. Battery joint ventures are unravelling, and major NMC battery orders are being cancelled.

Source: Content & analysis provided by CRU Group Distinguished Partner). For more information, visit crugroup.com Data from company financial reports.

Extracted from the PDF; charts and images may read imperfectly.