South Korea Lithium Ion Cell and Battery Market Expected to Reach KRW 22,000 Billion by 2022 Owing to Massive Growth in EV Sales and Rising Project Based Demand From the ESS Sector

Ken Research

GURUGRAM, India, January 9, 2019 /PRNewswire/ --

• Korea's Green Energy Policy is likely to contribute to growth in demand for lithium ion batteries through increase in supporting EV infrastructure and EV and ESS (Energy Storage System) subsidies.
• Rising production and demand for EVs expected to augment growth in the market.
• Growth in ESS sector in South Korea will also contribute to the lithium ion cell and battery market in South Korea.

Rising Demand for Electric Vehicles: Lithium ion batteries are widely used in electric vehicles and have slowly been replacing lead acid batteries. EV sales in South Korea, including EV, PHE and HEV, have been projected to grow from 121,812 units in 2018 to 423,448 units in 2022, registering a strong CAGR of 36.5% in the coming 5 years. This high demand for EVs will stem from the subsidies that the government is providing to the buyers through its own differentiated subsidy system as well as through the application avenue of Korea Environment Corporation. Adding to this is the growing infrastructure of electric vehicle charging stations and falling prices of EVs on an overall level. This expansion in demand for EVs will raise demand for lithium ion batteries, thus augmenting growth in the market.

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Growth in the ESS Sector in South Korea: In 2017, KEPCO (Korea Electric Power Corporation) became the world's largest operator of ESS for frequency regulation with a total capacity of 376 MW at 13 sites across the country. South Korea is gradually making the shift towards renewable energy from fuel based energy in line with its Green Energy Policy. Future pathways under the scheme include energy reforms such as price discounts for 10 years for ESS using companies and permitting ESS trading to promote investment of KRW 40 billion in addition to intensive support for the green energy industry. This is likely to augment the market through project based demand for lithium ion batteries. Provision of both ESS consumer and ESS producer based subsidies by the government will encourage a shift on part of the industrial and commercial sectors as well. Deployment of lithium ion batteries for ESS projects such as the Ulsan project will also augment growth in the market.