South Korea's three major battery manufacturers—LG Energy Solution, Samsung SDI, and SK On—saw their utilization rates plunge below 50% last year. The trio posted combined losses of 3.2 trillion won ($2.2 billion), excluding U.S. production tax credits, as production declined. With electric vehicle demand yet to recover while production facilities built years ago come online, earnings pressure continues to mount.
An analysis of the three companies' annual reports on the 16th revealed that LG Energy Solution's utilization rate fell to 47.6% last year, dropping below 50% for the first time in its history. The rate had been declining sharply each year—from 73.6% in 2022 to 69.3% in 2023 and 57.8% in 2024. Samsung SDI's utilization rate similarly dropped from 84% in 2022 to 50% last year, while SK On's plummeted from 86.8% to 48.7% over the same period.
The sharp decline in utilization rates reflects a mismatch between supply and demand: domestic and overseas plants built with trillions of won in investment have begun operations, but stagnant EV demand has kept production volumes low. LG Energy Solution's production capacity rose 7.9% to 51.47 trillion won (by product value) last year, yet actual production fell more than 11% to 24.50 trillion won.
The market share gap with China continues to widen. The combined global EV battery market share of Korea's three battery makers dropped 3.4 percentage points to 12.0% in January from 15.4% at the end of last year. Meanwhile, Chinese companies among the top 10 battery makers increased their collective share from 70.4% to 73.3%.