Assessing the Competitiveness of Secondary Battery Value Chains: Policy Implications

Secondary batteries are garnering more and more attention as a key to carbon reduction and eventually, carbon neutrality. Formerly associated mostly with IT devices such as laptop computers and mobile phones, secondary batteries are now enjoying renewed interest and rising demand as they are used to provide power for electric vehicles and to store electricity generated by renewable energy. Korea, China, and Japan are the three strongholds of the secondary battery industry on the world stage. The focus on accelerating the transition to electric vehicles has prompted both Europe and the United States to seek to enhance the stability of secondary battery supply chains, and they have both promulgated a series of measures to foster their own industries, threatening to raise the intensity of global competition and posing challenges for Asian manufacturers. Although Korean companies have been developing innovative secondary battery technologies since the early 1990s, the industry still faces key obstacles to growth, such as a high dependency on imported raw materials and limited domestic demand. In this report, we survey the structure and characteristics of the value chains of the secondary battery industry and assess comparative advantages with the goal of identifying how best to foster the future growth of the Korean secondary battery industry. In order to ensure Korea’s continued leadership in the global secondary battery market, it is critical to maintain the “super-gap” between Korean technologies and others, while also enhancing the robustness of the industry’s value chains.