Shares of top Korean makers of electric vehicle batteries and battery materials have slumped across the board this week, as changing global priorities raise uncertainty around the future demand for EVs.
Just this week, US carmaker Ford Motor said it will take a $19.5 billion writedown and kill several EV models — including the F-150 Lightning electric truck — in a retreat from battery-powered models.
Ford said it will pivot hard into gas and hybrid models signalling a deeper shift in the US auto industry from the Donald Trump administration’s pro-fossil fuel policies.
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Meanwhile, a day later, on Tuesday, the European Commission made public proposals that would reverse the bloc’s effective ban on sales of new internal combustion engine cars from 2035.
Together, those developments create immense uncertainty for Korean battery firms that are second only to China in supplying global EV-makers.
South Korea’s LG Energy Solution said on Wednesday, for instance, that Ford Motor had terminated an EV battery-supply deal worth about 9.6 trillion won ($6.50 billion).
The South Korean battery maker said in a regulatory filing that the termination followed a notice from Ford about halting production of some EV models.
Last October, LGES signed two contracts to supply EV batteries to Ford Motor in Europe starting in 2026 and 2027.
LGES shares slumped nearly 9% on Thursday and are down almost 15% for the week.
Analysts told Reuters that because the cancelled contract had been scheduled to begin in January 2027 it would be difficult to immediately secure new orders to replace the lost volume. And that would mean an inevitable delay in improvement of utilisation rates at LGES’ European plant in 2027.
Data centres the new priority
LGES’ filing came a week after its rival battery maker SK On said it had decided to end its joint venture with Ford for their joint battery factories in the US. In 2022, SK On and Ford invested $11.4 billion to build the plants.
Shares of SK On’s parent company SK Innovation slumped more than 5% on Thursday and are down close to 8% for the week.
The Korea Times reported on Wednesday that battery firms in the country were bracing for a potential hit to profits from shifting global priorities.
Those fears were reflected in the slump in shares of battery firms like SK On and LGES. Peers like Samsung SDI fell by more than 6% on Thursday and were down nearly 11% for the week. Similarly, shares of Korean battery materials manufacturers like L&F Co, Lotte Energy Materials and Ecopro BM were down 16%, 13% and 12% respectively.
The Korea Times report noted, however, that firms were now focusing on batteries for energy storage systems (ESS) that are quickly becoming critical to the global data-centre build-out.
LG Energy Solution will likely shift production lines in Poland to focus on ESS batteries, it said, noting that they were originally set up for Ford’s EV batteries. The company has already shifted production in the US state of Michigan to meet local ESS needs. SK On will also steer production in its US plant towards ESS, The Korea Times said.
The report also noted that Samsung SDI was on track to adapt its US lines for lithium iron phosphate (LFP) batteries for ESS projects. It plans to supply batteries worth $1.35 billion, it said.
- Vishakha Saxena
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