Home > Business > Industry

Major Korean battery makers shift focus to LFP production in AI era

Published: 10 Dec. 2025, 14:29 Updated: 10 Dec. 2025, 19:24

LG Energy Solution's battery factory in Wrocław, Poland, on Dec. 8, 2023 [LG ENERGY SOLUTION]

Korea’s three major battery makers — LG Energy Solution, Samsung SDI and SK On — are accelerating efforts to mass-produce lithium iron phosphate (LFP) batteries as they seek new opportunities amid a prolonged slump in electric vehicle (EV) demand.

Korea’s battery makers' portfolios have focused on high-performance nickel cobalt manganese (NCM) batteries, but they are turning to LFP largely due to the global expansion of the energy storage system (ESS) market. An ESS is a system that stores electricity for later use, and its demand is rising in tandem with the expansion of artificial intelligence (AI) data centers.

Market research firm SNE Research projects that the global ESS market will grow from 235 gigawatt-hours in 2024 to 618 gigawatt-hours in 2035 — an increase of more than 250 percent.

LG Energy Solution plans to begin manufacturing LFP batteries for ESS at its energy plant in Ochang, North Chungcheong, in 2027. The company was the first Korean battery maker to produce LFP batteries at its plant in Nanjing, China, at the end of 2023. It has since expanded production to Michigan this past June and will do the same in Wroclaw, Poland, early next year.

Other batter makers are following suit.

From the second half of next year, SK On will partially convert a production line at its SK Battery America plant in Georgia to manufacture LFP batteries for ESS. It will also install a dedicated ESS battery production line with an annual capacity of three gigawatt-hours at its plant in Seosan, South Chungcheong.

Samsung SDI plans to secure 30 gigawatt-hours of capacity by converting some lines at StarPlus Energy, its joint venture with Stellantis in the United States, to produce LFP batteries from the fourth quarter of next year. At a third-quarter earnings conference call in October, Park Jong-sun, the head of strategic marketing at Samsung SDI, announced that the company is “developing LFP and midnickel prismatic batteries, with mass production targeted for 2028.” He added that although the company is late to the market, it aims to catch up quickly and develop a differentiated selling point.

Samsung SDI headquarters in Giheung, Gyeonggi [SAMSUNG SDI]

Price and safety are key in ESS applications — and they are areas in which LFP batteries excel. While NCM batteries offer higher energy density and are better suited for premium EVs, LFP batteries are cheaper and more stable due to their cuboidal crystal structure in the cathode. LFP batteries now make up over 90 percent of the global ESS market, making them the de facto standard.

“ESS battery demand is still only around 20 to 25 percent of EV battery demand,” said Jeong Won-seok, an analyst at iM Investment & Securities, in a recent report. “But unlike the EV market, which is sensitive to economic fluctuations and subsidies, the ESS business is supported by the need to expand renewable energy and stabilize power grids, which allows for steadier growth.”

However, Korean companies face a major hurdle: Chinese battery makers dominate the ESS market, having secured a head start in LFP production. China’s CATL, the world’s largest battery manufacturer, holds more than 30 percent of global market share in terms of shipments, while the combined share of the three Korean firms remains under 10 percent.

SK On battery plant in the United States [SK ON]

“It’s not technically difficult to convert existing NCM production lines to LFP ones,” said one industry insider. “But the real challenge is how to differentiate from Chinese companies that have already established dominance in the LFP space.”

Still, the opportunity is growing. With tensions escalating between the United States and China and tightening restrictions on prohibited foreign entities, Korea is emerging as the only country outside of China with the capacity to mass-produce LFP batteries at scale. U.S. automakers like Tesla and General Motors are also expanding their EV lineups using LFP batteries.

“As battery demand continues to diversify, we plan to expand our portfolios to include both NCM and LFP products,” said another industry source.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY NA SANG-HYEON [[email protected]]