"Secondary Batteries Expected to Rebound in the Second Half After Initial Adjustment"

NH Investment & Securities analyzed on May 21 that the stock prices of the secondary battery sector are expected to rebound in the second half of this year after an initial adjustment.

Joo Minwoo, a researcher at NH Investment & Securities, said, "We expect a rebound to occur after an adjustment caused by the clarification of U.S. policy uncertainties (such as revisions to the IRA Act and the imposition of tariffs) in June and July, reflecting expanded sales to Europe and India."

He explained, "Electric vehicle sales in Europe are showing a marked recovery due to strengthened CO2 regulations," and added, "Although the Indian market is also expected to open up in the second half of the year, investors are more concerned about downside risks in the United States."

He continued, "It appears that the resolution of U.S. policy risks (such as the failure of passage in Congress) or the prior reflection of these risks in stock prices must occur first," emphasizing, "We present a conservative short-term outlook and a positive medium- to long-term outlook."

Researcher Joo predicted that in the United States, demand for electric vehicles will slow down until 2026. He explained, "The U.S. electric vehicle market is inevitably expected to experience a slowdown in demand until 2026 due to the elimination of purchase tax credits and the impact of tariffs, which will lead to higher actual purchase prices. This sluggish demand will inevitably result in reduced production, and consequently, a slowdown in the Advanced Manufacturing Production Credit (AMPC) is also anticipated."

On the other hand, he expected sales in Europe to increase rapidly. He said, "In Europe, in order to avoid fines under the 2027 CO2 regulations, an average annual sales increase of around 20% from 2025 to 2027 is required, so the performance of domestic companies in the European market is expected to steadily improve. As for the Indian market, the electric vehicle penetration rate is less than 2%, meaning it is virtually untapped, but as trade negotiations with the United States lower entry barriers such as tariffs, the market is expected to gradually open up starting in the second half of the year," he emphasized.