South Korea announces $29 billion to help its battery companies 'reduce foreign dependence'

South Korea on Wednesday announced plans to provide $29 billion in financing over the next five years to strengthen its battery industry and reduce reliance on foreign nations for materials.

A joint release issued by multiple ministries said the country would offer tax incentives and loan support for South Korean companies acquiring rights for minerals and other battery materials overseas, while increasing financial support for companies that refine and re-use such minerals.

South Korea also plans to increase financial support – largely loans, guarantees and insurance – from institutions like the Export-Import Bank of Korea to companies in the battery sector. The support will also extend to companies investing in North America to qualify for tax credits under of the US Inflation Reduction Act.

The country is also seeking to strengthen its secondary battery industry's competitiveness to the highest in the world over the long-term, the release said.

South Korean companies play a pivotal role in the global battery sector, but have tempered sales outlooks for 2024 due to a slowdown in sales of electric vehicles. In the release, the ministries claimed that South Korea-headquartered LG Energy Solution, Samsung SDI and SK On held 49 percent share of the global battery market (excluding the Chinese market) as of 2022, but added that their dependence on foreign countries for key raw materials made diversification crucial.