The South Korean government and private companies will invest a combined 8.4 trillion won ($6.0 billion) to broaden the country's battery strategy beyond high-nickel NCM cells into sodium-ion and solid-state technologies. The plan aims to widen the technology portfolio from low-cost to high-performance batteries as China's push into cheap cells intensifies.
The Ministry of Trade and Industry unveiled its battery industry technology roadmap on the 22nd at the Korea Chamber of Commerce and Industry in Seoul, with LG Energy Solution, Samsung SDI, SK On, POSCO Future M, L&F and EcoPro BM in attendance. The government will create a research and development program worth about 400 billion won from 2027 to 2031, while the private sector will invest roughly 8 trillion won in R&D and facilities by 2030.
Government support will concentrate on low-cost sodium-ion batteries and high-performance solid-state batteries. For sodium-ion cells, developers aim to reach 160 watt-hours per kilogram next year and complete development of 220 Wh/kg technology by 2030 for use in entry-level electric vehicles and energy storage systems. For solid-state batteries, the goal is to secure 400 Wh/kg technology by 2028 and begin commercial production in 2030, targeting high-performance EVs as well as the robot, drone and urban air mobility markets.
Joint development is also planned to reduce duplicate investment among companies. The three cell makers will set common specifications in non-competitive areas such as formats and next-generation current collectors, and will pursue linked R&D in which cell makers test and purchase products developed by materials suppliers. A system will also be built to use battery management system data from automakers in cell and materials development.
Private companies will pursue process innovation, development of lower-cost materials and localization of key materials. The government plans to provide tax support for domestic production and build a battery recycling system.
Lee Min-woo, head of the ministry's industrial growth office, said the government will provide full support through large-scale R&D funding and institutional incentives so that Korean batteries can firmly reclaim leadership in the global market.
The government and the industry are widening their bets to sodium-ion and solid-state batteries because the structure in which Chinese firms capture the gains of growth is hardening even as the EV market recovers. The idea is to move away from a growth strategy centered on expensive NCM batteries and electric vehicles, and to expand both technologies and end markets — from low-cost cells to energy storage and next-generation mobility — to reshape the competitive landscape against China.
Europe's EV market grew 30% last year from a year earlier, but the combined share held by Korean battery makers fell to 35% in 2025 from 55% in 2023. Over the same period, Chinese companies climbed to 61% from 42%. Korea's secondary battery exports also fell 27.6% in three years, to $7.23 billion last year from $9.98 billion in 2022. Hwang Kyung-in, a research fellow at the Korea Institute for Industrial Economics and Trade, said the root cause of the crisis facing Korean batteries is not the EV demand lull itself but weakening competitiveness in the country's main markets and main products.
The slide reflects a heavy loss in the price competition against Chinese lithium iron phosphate cells. According to the International Energy Agency, LFP accounted for more than 55% of global EV batteries last year and more than 90% in energy storage systems. LFP battery packs were on average more than 40% cheaper than NCM packs. In global EV battery supply from January through July this year, CATL held 39.9% and BYD 14.7%, giving the two Chinese companies a combined 54.6%.
The price gap is not only a matter of battery chemistry. China has built a supply chain running from materials to cells, along with overwhelming production scale, allowing it to lower costs and then use those low prices to expand volumes further in a self-reinforcing cycle. For Korean companies, catching up now by simply adding LFP capacity would mean starting from a different line altogether.
That is why the government is putting the weight of its R&D on sodium-ion and solid-state batteries rather than LFP itself. Rather than chasing a market China dominates on volume, the aim is to find the next low-cost technology for price-sensitive markets while securing mass-production technology first in high-value markets where no winner has emerged. The strategy does not abandon NCM but expands both battery types and end markets at the same time.
Sodium-ion batteries use no lithium, nickel or cobalt, giving them potential to reduce raw material costs and supply chain risk. Their energy density is lower, but there is considerable room to use them in energy storage systems and entry-level EVs, where price and safety matter more. Still, they have yet to establish a clear price advantage over LFP, and Chinese companies including CATL and BYD are already moving quickly on development and mass production. The supply chain for hard carbon, the key anode material, is also heavily concentrated in China. For Korea, this looks less like claiming unoccupied ground than like a race to avoid ceding the next generation of the low-cost market it already lost in LFP.
Solid-state batteries, by contrast, are still an open field. Replacing liquid electrolytes with solid ones can sharply improve energy density and thermal stability compared with conventional lithium-ion batteries, but cycle life, manufacturing processes and high production costs remain obstacles to commercialization. The Korea Automotive Technology Institute projects that small-scale production of compact solid-state batteries could begin as early as 2027 to 2028, with application in electric vehicles becoming visible after 2030. Manufacturing costs are currently three to five times those of conventional lithium-ion batteries. Maeng Jin-kyu, a researcher at the institute, said achieving economies of scale is the key to securing an overall advantage in performance and cost.
Markets beyond electric vehicles are also emerging as a new battleground for Korean batteries. Energy storage systems in particular are growing quickly on the back of expanding renewable energy and the spread of artificial intelligence data centers. The Korea Institute for Industrial Economics and Trade projects global ESS demand will rise to 1,449 gigawatt-hours in 2035 from 185 GWh in 2023, an average annual increase of 19%. Batteries for uninterruptible power supply systems in AI data centers are expected to grow 40% a year on average over the same period. If the current LFP-centered competitive structure persists, however, the benefits of that market expansion are likely to flow mainly to Chinese companies.
Analysts point to the U.S. market as a way through. The United States is raising tariffs on Chinese-made ESS while applying advanced manufacturing production credits to batteries made locally and phasing in restrictions on the use of Chinese materials. Korean companies that already operate large production bases in the United States could narrow the cost gap with China if they build supply chains outside the country, according to this analysis. The institute expects the U.S. ESS market to expand to 320 GWh in 2035 from 55 GWh in 2023.
Hwang said Korean companies, which can produce locally in the United States and have a high chance of successfully building supply chains outside China, are likely to be at an advantage in securing cost competitiveness in the U.S. market.
