Exodus of U.S. clients pushes Korean battery makers to the brink
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The latest termination originated from Freudenberg's decision to exit the battery business due to sluggish demand. Under the original plan, the U.S. firm planned to assemble battery modules produced by LG Energy Solution into complete battery packs and supply them to major North American commercial vehicle manufacturers, including those producing large buses and electric trucks.
Earlier on Dec. 17, LG Energy Solution also disclosed the cancellation of a $6.5 billion deal with Ford Motor.
The termination is widely attributed to the contraction of the North American EV market, triggered by the Donald Trump administration’s decision to roll back the $7,500 EV tax credit. With subsidies withdrawn, automakers have increasingly scaled back their commitment to EVs, dampening demand across the supply chain.
Ford suspended production of the F-150 Lightning electric pickup and has recalibrated its strategy to prioritize higher-margin hybrid models and internal combustion engine vehicles.
LG Energy on Wednesday also moved to shore up liquidity by selling buildings, equipment and other assets of its U.S. joint venture with Honda to the Japanese automaker's U.S. subsidiary for about 4.2 trillion won.
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“With raw material prices fluctuating on a daily basis, manufacturers cannot keep facilities running continuously by building inventory in advance without any sight of a sale,” Lee added. “With LFP having already emerged as the industry standard, Korean companies must seriously ask themselves whether they can still secure meaningful compe iveness in a scenario in which the United States lowers tariffs for Chinese products.”
The combined market share of Korea’s three major battery manufacturers in the European EV battery market stood at 35 percent between January and October this year, marking a 10 percentage point decline from the level recorded at the end of 2024, according to SNE Research.
During the same period, Chinese brands claimed 64 percent.