The strategic recalibration underway at Korea’s leading battery manufacturers reflects a hard data point confronting the North American market. After years of capacity expansion tied to electric vehicle growth forecasts, US automakers are now pulling back.
More than €22 billion in asset writedowns announced by Stellantis last week underscores how sharply assumptions around EV demand have shifted, with direct consequences for battery suppliers that built their US strategies around joint ventures and long-term offtake agreements.
That reassessment is already reshaping industrial footprints. According to Bloomberg, Stellantis is exploring an exit from StarPlus Energy, its US battery joint venture with Samsung SDI, only months after the first Kokomo, Indiana plant began operations in December 2024. The two-plant project represents a combined $6.3 billion investment, yet the automaker is now reportedly considering selling its stake to a third party as it scales back electrification spending and prioritizes cash preservation. The move follows Stellantis’ symbolic $100 sale of its 49 percent stake in NextStar Energy to LG Energy Solution in Canada, exiting a partnership once valued at roughly $964 million.
These developments are not isolated. General Motors transferred full ownership of its third Ultium Cells plant in Michigan to LG Energy Solution last year, while Ford and SK On dissolved their BlueOval SK joint venture in December, splitting ownership of three US plants. SK On will control the Tennessee facility still under construction, while Ford assumes ownership of the two Kentucky plants. The common denominator is a retreat by US automakers from shared-risk battery investments after federal consumer EV subsidies were abolished in September 2025, contributing to weaker-than-expected demand across the North American EV market.
For Korean battery makers, the immediate response has been to redirect capacity toward energy storage systems. The timing is not accidental. North American ESS demand is expanding rapidly, driven by data center load growth linked to artificial intelligence deployment and reinforced by production and investment tax credits under the Inflation Reduction Act. During recent earnings calls, LG Energy Solution indicated it is targeting more than 90 gigawatt-hours of ESS orders this year, largely in North America. SK On has set a 20 gigawatt-hour ESS order target, while Samsung SDI aims to increase annual ESS sales by about 50 percent year on year. Plants previously earmarked for EV battery production are being repurposed or planned primarily as ESS manufacturing bases.
The scale of these targets highlights both opportunity and limitation. While utility-scale and commercial storage installations are growing quickly, the absolute volumes and pricing dynamics differ materially from EV batteries. Industry analysts point out that ESS battery packs are typically priced lower per kilowatt-hour to remain competitive, especially as US developers increasingly favor cost-optimized chemistries. This is accelerating Korean manufacturers’ expansion into lithium iron phosphate production for stationary storage, a segment where Chinese suppliers have historically held a cost advantage.
Margin expectations remain a central concern. EV batteries have long been the primary profit engine for Korean cell makers, supported by higher energy density requirements and tighter integration with vehicle platforms. Energy storage, by contrast, is more exposed to commodity pricing, system-level competition, and standardized formats. Lee Ho-geun, an automotive engineering professor at Daeduk University, characterizes the shift as a tactical adjustment rather than a structural solution, arguing that even rapid growth in storage demand is unlikely to replicate the scale and volume economics of the EV market.
Executives and researchers within the industry echo that caution. While mid- to long-term margins for large-scale ESS batteries may converge somewhat with those of EV cells, the business lacks the same capacity for sustained pricing power. One researcher at a Korean battery firm noted that ESS should not be framed as a replacement for EV batteries, but as a complementary outlet for capacity during periods of automotive demand volatility.
Energy storage provides a near-term demand buffer and a way to utilize newly acquired US facilities, but it does not fully offset the strategic risk created by slower EV adoption and dissolving automaker partnerships.
