South Korea’s major battery makers saw plant utilization rates continue to fall in the first half of 2025 as global EV demand slowed, according to semiannual reports.

LG Energy Solution reported its average factory utilization rate dropped to 51.3% in H1 2025, down from 57.8% in 2024, 69.3% in 2023, and 73.6% in 2022.

Samsung SDI’s small battery plant rate declined to 44%, while SK On’s rate rebounded to 52.2% after dropping to 43.6% in 2024.

The companies continued investment in research and development despite lower output.

LG Energy Solution allocated 620.4 billion won (US$446.7 million) to R&D, or 5.2% of revenue.

Samsung SDI invested 704.4 billion won (US$507.1 million) , or 11.1% of sales, up from 7.8% the year before.

SK On spent 148 billion won (US$106.6 million) on R&D, representing 0.52% of sales.

LGES CEO Kim Dong-myung said the market is expected to recover starting in 2026.

🔗 Source: Yonhap

🧠 Food for thought

1️⃣ Current downturn contrasts sharply with battery industry’s historical exponential growth

The sharp decline in Korean battery plant utilization rates represents a temporary deviation from the industry’s remarkable long-term trajectory.

Battery sales have been doubling every 2-3 years for three decades, maintaining a 33% average annual growth rate that accelerated to nearly 40% in the last decade due to EV adoption1.

Even as Korean manufacturers report utilization rates falling below 52%, global battery demand was still projected to grow 53% year-over-year in 2023, reaching 950 GWh2.

This suggests the current “EV chasm” represents a cyclical adjustment rather than a fundamental shift in the industry’s growth fundamentals.

2️⃣ Strategic R&D investments during downturns position companies for next-generation leadership

Recent LG Energy Solution developments