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[Why Korea 18] Korea's Battery Giants Survived the EV Chasm. Now Comes the Pivot

EV, battery storage units, and data center servers collage with "The Battery Industry Is Looking Beyond EVs" text overlay

In the last piece, we talked about renewable energy's biggest weakness: intermittency. No sun, no wind, no power — however much you've built.

But the companies that were supposed to solve that storage problem had, until recently, been struggling for a completely different reason.

Korea Already Reached the Top Once

Korea wasn't first to the battery business. But once it got there, it did surprisingly well, right from the start.

LG Chem (now LG Energy Solution) began researching lithium-ion batteries in 1995, and by 1999 had become the world's second company — after Japan — to mass-produce them. Then, in 2020, LG Chem actually made it to the top. Riding strong sales of the Tesla Model 3 and Audi e-tron, it took the global lead in EV battery usage, overtaking both CATL and Panasonic. Samsung SDI and SK Innovation (now SK On) both landed in the global top ten the same year.

A company that had walked a path nobody else had taken 25 years earlier had made it to the summit.

Then came the hard part.

When EVs Stumbled, So Did the Battery Makers

First, it's worth understanding why these companies have had such a rough few years.

In the first quarter of 2026, the combined market share of LG Energy Solution, Samsung SDI, and SK On in the global EV battery market — excluding China — stood at 29.6%. That's down 8.3 percentage points from a year earlier. The market itself grew 17.4% over the same period. Korea's share of it shrank anyway.

China filled the gap. CATL pushed its share up to 33.8% over the same stretch, while BYD overtook SK On for third place. Backed by cheap LFP (lithium iron phosphate) batteries, Chinese firms have been steadily gaining ground even outside their home market.

A slowdown in North America made things worse. Ford halted production of the F-150 Lightning; Volkswagen's ID.4 sales sagged; Rivian and Jeep both slowed. When Korea's three biggest customers wobbled, the shock passed straight through to their battery suppliers.

In a market Korea had dominated for years, holding on to its old position was getting harder by the quarter.

Korea Had Already Failed at ESS Once, Too

So the obvious question follows: if EVs are struggling, why not pivot to ESS (energy storage systems)?

As it turns out, Korea had already tried that road once — and stumbled badly.

In August 2017, a fire broke out at a solar-linked ESS facility in Gochang, in Korea's North Jeolla province. It was only the beginning. Eighteen more fires followed in 2018, eleven in 2019. By 2021, the Ministry of Trade, Industry and Energy had logged 28 ESS fires in total.

What made it worse was that even the cause kept shifting. A 2019 joint public-private investigation pointed to problems in protection, operation, and management rather than defects in the batteries themselves. But fires kept happening after that finding was announced, and a second investigation pointed back toward battery-related issues as the primary cause. The understanding of what had gone wrong changed with each round of investigation, and public confidence in ESS safety didn't come back easily in the meantime.

The fires froze the entire industry. New installations slowed, and a market that had been growing quickly went into a multi-year slump.

Korea was good at making batteries. It turned out to be a different matter to run them safely at scale.

But the Numbers Just Released Tell a Different Story

Which is exactly why the latest earnings from Korea's three battery makers matter.

Battery Big Three — Q2 2026 Results

Company Revenue Operating Profit
LG Energy Solution KRW 7.56 trillion KRW 113.3 billion
Samsung SDI KRW 3.77 trillion KRW 203.8 billion
SK On (battery business) KRW 2.95 trillion KRW 821.8 billion

None of the three companies owed their improved results to EVs. They owed them to ESS.

As growth in the EV battery market cooled, demand from AI data center power infrastructure and from grid stabilization tied to renewable expansion pushed ESS into a new growth track. (As we've covered in earlier pieces, Korea is trying to solve surging power demand and renewable expansion at the same time — part of the answer is showing up here.)

A market that had once lost the industry's trust had, within a few years, become the most important one again.

Three Companies, Three Different Bets

What's interesting is how differently the three companies are approaching ESS. In a sentence each:

LG Energy Solution is betting on AI data centers — with LFP-based UPS (uninterruptible power supply) rack systems built specifically for data center use, pulling power reliability itself into the battery business.

Samsung SDI is betting on safety. Leading with a "zero power gap" UPS lineup alongside an AI-driven fire-prevention software system (SBI) is probably not a coincidence for a company that lived through 2017–2021.

SK On is betting on conversion — retooling EV production lines at its Tennessee and Georgia plants for ESS, and stepping away from the joint-venture structure it long shared with automakers.

Same destination, three different roads to get there.

When price competition doesn't work, you compete somewhere else — we saw this pattern before, in Korea's shipbuilding story. That time it was LNG carriers. This time it's safety technology. (→ [The Lights Went Out at the Shipyard — Korea's Shipbuilding Crisis and Comeback](Episode 12 URL here))

So, Why Korea?

Korea's battery industry isn't fleeing to some entirely new market.

It's closer to this: as price competition with China in EVs became too costly to win, Korea went looking for ground where it could still hold an edge. And along the way, a memory that once looked like nothing but a painful failure — the safety systems and operating know-how forced into existence by a wave of fires — has turned into today's weapon instead.

China won the race to make batteries cheaper. So — can Korea win the race to store them more safely, and more intelligently?

Curious about Korea?

So am I.

Key Takeaways

  • In Q1 2026, the combined share of Korea's three battery makers in the global EV battery market (excluding China) fell to 29.6%, down 8.3 points year-on-year, as CATL and BYD filled the gap.
  • Between 2017 and 2021, Korea suffered 28 ESS fires, struggled to pin down a consistent cause, and saw the entire industry slump for years afterward.
  • In Q2 2026, all three battery makers posted improved results — driven not by EVs but by ESS, as AI data center and grid-stabilization demand became a new growth engine.
  • LG Energy Solution (AI data centers), Samsung SDI (safety technology), and SK On (production-line conversion) are each pursuing the ESS market in a different way.

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