The Term 'Chasm' Used Only in Korea [Energy-topia]

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"The term 'electric vehicle chasm (Chasm·temporary growth stagnation)' is used only in Korea."

Recently, I heard this from the CEO of a small and medium-sized secondary battery company and searched for "electric vehicle chasm" in English on Google. In fact, most of the article sources related to the electric vehicle chasm over the past year were Korean media.

The recent overseas media case mentioning the electric vehicle chasm was an article analyzing Tesla's sales decline in May last year. In 2023, when Chinese electric vehicle sales slowed down, the term chasm was used. However, recently, the word chasm is rarely used overseas.

On the other hand, in Korea, articles related to the electric vehicle chasm pour out almost daily. The most frequently heard word at InterBattery 2025 held at COEX, Seoul, from the 5th to the 7th, was chasm. So, is the electric vehicle chasm something without substance? Not exactly. Overseas, instead of the word chasm, they simply use the term 'slow down.'

The reason why the expression chasm is particularly favored in Korea is that the shock of the slowdown in electric vehicle sales is stronger than in any other country.

The growth trend of electric vehicles began to falter in the second half of 2023 when countries started reducing electric vehicle subsidies. Although the U.S. did not reduce subsidies, the Inflation Reduction Act (IRA) curbed the number of eligible models to counter China. As electric vehicle prices rose, the general public lost the incentive to buy electric vehicles.

The solution chosen by electric vehicle manufacturers was simple: instead of subsidies, lower the price of electric vehicles. To do this, they turned to the inexpensive Chinese lithium iron phosphate (LFP) batteries. Tesla and other American and European electric vehicle manufacturers have successively increased the number of models equipped with LFP batteries. Chinese battery companies, including CATL, were able to overcome the crisis this way. Korea, which did not have an LFP battery product lineup, had nothing to boast about.

Last year, all domestic battery companies recorded poor business performance. They attributed this background to the 'electric vehicle chasm.' However, CATL in China recorded a record operating profit of $6.7 billion (about 9.7 trillion KRW) last year. There was no talk of a chasm in China. CATL maintains price competitiveness thanks to its solid domestic supply chain and economies of scale.

Of course, not all Chinese battery companies are doing well. As secondary battery companies proliferated, oversupply led to price competition. Companies lacking competitiveness are becoming targets of restructuring. China is seeking survival by pushing the batteries accumulated in inventory into the global market. The biggest victims are, again, Korean battery companies.

Korea is the most affected by the global electric vehicle sales slowdown because it failed to predict and misjudged external market changes. Underestimating the competitiveness of LFP and going all-in on ternary batteries was a painful mistake. Some argue that LFP batteries should be commercialized quickly, but it is also true that the timing is too late.

LG Energy Solution, Samsung SDI, and SK On, the three domestic battery companies, exhibited various product lines at InterBattery 2025 this year. While in the past the emphasis was on 'differentiation,' this year they stressed that they "have a full lineup." Could this be a lesson learned from the past? An executive of a battery company said, "We are preparing to overcome any wave that comes." Passing through the chasm, we hope Korean battery companies will leap forward again in the upcoming second growth phase.