Reuters – US battery autonomy will upend EV hierarchy
HONG KONG, Jan 2 (Reuters Breakingviews) – In 2026, U.S. battery supply will outstrip demand, ending dependency on imports. Former President Joe Biden’s policies set the changes in motion, and successor Donald Trump may take the credit. But the real winners are Korea’s LG Energy Solution (373220.KS), Samsung SDI (006400.KS), and SK On, who will be better able to take on China.
U.S. demand for lithium-ion batteries, used to power cars and store energy, has been accelerating, but domestic supply failed to keep pace: consequently, for storage alone, the country has imported, more than $100 billion in batteries and components since 2021, according to S&P Global, roughly half of which came from China. Increasing reliance on the People’s Republic – total lithium-ion battery shipments grew 15-fold in the decade to 2024, per International Trade Centre data – worried policymakers.
Biden’s 2022 Inflation Reduction Act flipped the script. The scheme awarded generous credits for local investment and production, slashing, battery-making costs by 30%, the Center on Global Energy Policy estimates. Setting up factories was especially enticing for Korean giants, since Chinese rivals, including the world’s largest battery maker Contemporary Amperex Technology (300750.SZ), were effectively excluded. Now, the country could see an oversupply of lithium-ion batteries as soon as 2026, per Benchmark Minerals forecasts.
South Korean producers have invested some $20 billion to build out capacity, per S&P, and will account for more than two-fifths of the growth in production between 2025 and 2029, Benchmark Minerals estimated in 2024. The U.S. was LGES’s largest market by sales in the first half of 2025, and SK On expects to have more than doubled its capacity there in that year, compared with 2024.
That’s feeding through to earnings. LGES and Samsung will turn a 2025 loss to a 2026 net profit of $700 million and nearly $400 million, respectively, according to Visible Alpha. SK Innovation’s (096770.KS), battery subsidiary SK On needs longer to reach profitability, but revenue will increase around 50% in the year ahead, Jefferies estimates. While Trump terminated electric-car subsidies in September, the energy storage market is growing quickly due to demand from AI data centres, and manufacturers are retooling production to cater to the latter.
There are other perks. Higher overall sales drive economies of scale in sourcing and also research. That, coupled with the lack of Chinese competition, has helped the Koreans play catch-up in commercialising lithium ferrous phosphate chemistry, a cheap and long-lasting kind of battery in which China’s players until recently boasted a global monopoly. LGES is now producing LFP products in the U.S. while Samsung begins production in 2026, and SK On is in discussions with automakers. The U.S. is also a good testing ground for alternatives like lithium manganese-rich cells. That will help the three in other major markets like Europe.
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Reuters – US battery autonomy will upend EV hierarchy, source
