This story is part of Forbes’ coverage of Korea’s Richest 2022. See the full list here.
As the world accelerates towards low-carbon transport, South Korea is making sure it’s on board. Approximately 30% of the world’s electric vehicle (EV) batteries are manufactured by three of the country’s largest family-owned conglomerates, according to a February report from SNE Research in Seoul.
Leading the business giants is LG Energy Solution, the EV battery unit of LG, whose president and CEO Koo Kwang-mo has a net worth of $1.75 billion. In January, the unit had the biggest IPO in Korea, raising $10.7 billion. SNE says it is the world’s second-largest producer of electric vehicle batteries, with a 20% market share, after Chinese billionaire Robin Zeng’s 33% Contemporary Amperex Technology.
Samsung SDI, the battery arm of Jay Y. Lee’s Samsung conglomerate, first entered the EV battery market in the 2010s. Its factories, which have around 5% market share, are located in China, Hungary and South Korea. Lee has a fortune of $9.2 billion.
A newcomer to the industry is the SK On, Chey Tae-won’s SK EV battery pack. It split from parent company SK Innovation last September. SK On’s 6% market share comes from sourcing from automakers such as Ford and Volkswagen. Chey’s net worth stood at $2.4 billion.
Helping to encourage the expansion of the three chaebols is the government’s national “K-Battery” strategy. Last July, President Moon Jae-in unveiled plans to make South Korea the world’s leading electric vehicle battery maker by 2030. LG, Samsung and SK have been chosen to invest $35 billion in facilities and R&D, in exchange tax cuts of up to 50% and other benefits. LG Energy Solution says it will invest $21 billion.
The push comes at a time when EVs are becoming mainstays for global automakers and gaining popularity among governments. An EU bill would ban new non-electric vehicles by 2035, and President Joe Biden wants the US government to stop buying non-electric cars by that year. Six million EVs are expected to ship worldwide this year and 36 million by 2030, according to a January report from Gartner.
Richard Kim, associate director of automotive supply chain and technology at S&P Global, says it will be very difficult for Korean companies to take the lead in EV battery production from Chinese manufacturers, which have long benefited from aggressive subsidies and other forms of support. from the government . He says chaebols can leverage synergies in research and development. “[Korean companies] have accumulated knowledge about battery cell manufacturing,” says Kim. “They could develop technologies on their own and nurture relationships with original equipment manufacturers, which would be a strong weapon for them to grow.”
LG Energy Solution, Samsung SDI and SK On are racing to develop alternatives to lithium-ion batteries, the current standard for EVs. Demand for EVs could outpace world lithium supplies by 2025, according to analysts at UBS last year — this supply chain problem may have been exacerbated by Russia’s invasion of Ukraine, a major source of the metal. In March, Samsung SDI began building a pilot production line for South Korea’s first solid-state batteries, a leader of the government’s goal of commercializing the batteries by 2027, while SK On began research into battery-based batteries. sulfide.
Despite obstacles in the way, investors remain positive about the future of electric vehicle batteries, particularly in new applications. Shares in Chunbo, which makes electrolytic components for EV batteries, rose sharply in the past year, making founder Lee Sang-ryul a billionaire. He debuts on the list with a net worth of $1.4 billion.