[Column] Companies Directly Pleading with the Political Sphere

"It is truly extremely difficult. If things continue like this, China will catch up with us completely."

This was the sentiment expressed by a representative from a domestic battery and secondary battery company, sharing their struggles at the "Forum on the Introduction of a Direct Refund System for Secondary Battery Industries" held at the National Assembly Members’ Office Building in Yeouido, Seoul, on February 4.

Another battery company brought along five government affairs staff members in addition to an executive attending the forum. With electric vehicle demand stagnating and supply competition intensifying to the point of threatening their survival, they visited the National Assembly in person to appeal for legislative support. According to National Assembly officials, such visits have become noticeably more frequent compared to the past.

Amid these urgent appeals from the industry, a sense of crisis is spreading across the political spectrum, with both ruling and opposition parties acknowledging, "This must really be a serious issue." Even opposition parties, traditionally reluctant to support large corporations, have joined in, emphasizing that "the development of solid-state batteries is the most crucial factor in creating a global technological lead," and calling for government support measures.

The industry's demands are straightforward. In the midst of fierce global competition, companies are staking everything on research and development and facility investment, and are asking the government to cover part of these costs. This issue has been under discussion since the 21st National Assembly. However, without active debate, the proposal remained pending and was ultimately discarded when the session ended.

With political decision-making stalled, the industry, unable to wait any longer, has rolled up its sleeves and taken action. Even though they know it will take a long time for the law to pass and for the government to be persuaded, they have decided to move forward.

As of the fourth quarter of last year, the three major domestic battery companies-LG Energy Solution, Samsung SDI, and SK On-are expected to record their first simultaneous losses. The deficit for each company is projected to exceed 200 billion won, and both LG Energy Solution and Samsung SDI are facing losses for the first time in years. Despite these adverse conditions, they cannot stop investing, as their large-scale factories are already built and cannot be left idle. They also cannot afford to neglect research and development, since missing the right timing could lead to a predictable scenario of losing out to China in the competition.

The "battery boom" emerged on the back of heightened expectations for eco-friendliness, decarbonization, and the "age of electricity." However, contrary to previous forecasts, the global eco-friendly trend has not gained much momentum. As the economy slowed, countries implemented protectionist measures, focusing on immediate economic stimulus rather than green policies. Industries that had soared on policy support are now hamstrung by policy delays. Most experts agree that a "nation-saving decision" is now required.

The battery industry is now truly standing at the edge of a cliff. Whether it will soar by seizing a "supercycle" or fall behind in the competition for dominance is not something that can be controlled by the efforts of individual companies alone.

The government must consider how to support companies with the will to do business. The government has designated the battery industry as a national high-tech strategic sector and has worked to promote its growth. Now, the only remaining task is to foster a company that can become "the sole supplier" and move beyond the current oversupply regime.