Production Capacity Utilization of South Korea’s Top Three Battery Manufacturers Only Around 50% in First Half of Year

According to foreign media reports, due to the significant expansion of Chinese companies in the global electric vehicle market, the three major South Korean battery manufacturers—LG Energy Solution, SK On, and Samsung SDI—maintained a capacity utilization rate of only about 50% in the first half of 2025.

Image source: LG New Energy

According to the semi-annual report released by LG Energy Solution on August 14, the average capacity utilization rate of the company’s global factories was 51.3% in the first half of this year, with a product output value of approximately 10 trillion Korean won (about 7.2 billion US dollars). It is reported that the average capacity utilization rate has been continuously declining: it was 69.3% for the whole of 2023, and dropped to 57.8% in 2024.

In addition, SK On's capacity utilization rate for the first half of this year was 52.2%. Although it has rebounded from 43.6% in 2024, it is still significantly lower than the 87.7% level in 2023. Due to increased production efforts by Korean automaker Hyundai Motor in the United States during the first half of this year, SK On's U.S. factory supplying batteries to Hyundai is already operating near full capacity.

Although Samsung SDI has not disclosed the capacity utilization rate of its mainstream electric vehicle battery business, it has revealed that the capacity utilization rate of its small battery division is 44%. However, industry estimates indicate that the company's overall capacity utilization rate is approximately 50%.

Reportedly, in the first quarter of this year, the capacity utilization rate of Samsung SDI's European factory was only 30% to 40%, and it only began to gradually recover in the second quarter. Meanwhile, the capacity utilization rate of its US factory, which is operated by a 50-50 joint venture with Stellantis, was also estimated to be below 60% in the first half of the year.

Behind the low capacity utilization rate of South Korean battery companies is the rapid rise of Chinese companies in the global electric vehicle sector. According to data from SNE Research, in the first half of 2025, although the installed capacity of electric vehicle batteries outside of China increased by 23.8% year-on-year to 209.2 GWh, the combined market share of South Korea's three major battery companies fell by 8.1 percentage points year-on-year to 37.5%.

In the first half of this year, among the top ten global electric vehicle battery installations outside of China, LG Energy Solution and SK On saw growth in their battery installations, with year-on-year increases of 2.2% and 10.6%, reaching 43 GWh and 19.6 GWh, respectively, ranking second and third in the market. In contrast, Samsung SDI experienced a year-on-year decline of 7.8% in battery installations, ranking fifth.

In comparison, the growth rate of Chinese battery manufacturers far exceeds that of their Korean counterparts. In the first half of this year, a total of five Chinese electric vehicle battery manufacturers made it into the top ten list for electric vehicle battery installations outside of China. Among them, CATL, ranking first globally, and BYD, ranking sixth, saw their battery installations increase by 33.2% and 153% year-on-year, respectively. The other three Chinese companies on the list also experienced year-on-year growth exceeding 30%.

To address the aforementioned challenges, South Korean companies are increasing their R&D investments. In the first half of 2025, Samsung SDI led in R&D expenditure, reaching 704 billion KRW, accounting for 11.1% of its total sales, a significant increase from 7.8% in the same period last year; LG Energy Solution invested 620 billion KRW in R&D, accounting for 5.2% of its sales, higher than 4.2% in 2024; SK On’s R&D expenditure during the same period was approximately 148 billion KRW, accounting for 0.52% of its sales.