01 The Toppled "Technology Pyramid"

For a long time, the global battery industry followed an invisible "technology pyramid": high-energy-density ternary lithium batteries occupied the premium segment, while LFP batteries were confined to low-end vehicles. Korean battery firms, leading in ternary lithium technology, securely occupied the pyramid's apex.

Evolution of the Global Power Battery Technology Landscape (2021-2025)

• 2021: Ternary lithium dominates (approx. 60% share), primarily in mid-to-high-end vehicles; LFP seen as a "cost-effective choice."

• 2023: Tesla's large-scale shift to LFP prompts global automakers to re-evaluate their technology roadmaps.

• 2024: LFP's share of new global orders surpasses ternary lithium for the first time.

• 2025: Luxury brands like Mercedes-Benz, BMW, and Audi announce LFP adoption for entry-level models, completely breaking down the technological stratification.

"What we face is not just competition between technologies, but a complete restructuring of the industry's value assessment system," confessed an LG Energy Solution executive in an internal meeting.

Market data reveals a stark reality: from January to October 2025, Chinese battery makers held over 95% of the global LFP battery market, while the combined share of Korea's top three battery firms was less than 3%. This gap exists not only in production capacity but also in complete supply chain control and cost management capabilities.

02 The Korean Path of "Reverse Innovation"

Facing technological disadvantage, Korean battery firms are not simply replicating their Chinese rivals' path. Instead, they have chosen a "reverse innovation" strategy: leveraging their process expertise from the ternary lithium era to redefine the performance boundaries of LFP batteries.

Notably, the R&D direction of Korean firms differs significantly from the industry mainstream. While global battery makers compete to lower LFP costs, Korean companies have chosen a "performance-first" differentiation strategy. "Our goal is not to make the cheapest LFP battery, but the highest-performing one," stated Samsung SDI's R&D lead.

This strategic choice is based on a precise grasp of market segments. Research indicates that European and North American consumers remain more sensitive to EV range than price, leaving room for high-performance LFP batteries.

03 Geopolitics and the Capacity Layout Game

Battery industry competition has long transcended mere technology and cost; geopolitics is now a key variable reshaping the industrial landscape. The US Inflation Reduction Act (IRA) and the EU's new Battery Regulation are redrawing the global battery supply chain.

In this context, Korean battery firms demonstrate remarkable geopolitical agility:

• LG Energy Solution: Investing $2.7 billion in an LFP gigafactory in Michigan, USA, targeting 40 GWh annual capacity by 2027 to serve GM, Ford, and meet IRA requirements.

• SK On: Adjusting the technology roadmap for its BlueOval SK joint venture with Ford, shifting part of its planned ternary lithium capacity to LFP to meet surging US demand for low-cost batteries.

• Samsung SDI: Establishing a dedicated LFP R&D center at its expanding Hungarian plant, targeting the dual European demands for "localized supply chains" and "green batteries."

These moves reflect a core strategic intent: to build regionalized, localized LFP supply chains amid deglobalization trends, avoiding trade barriers and staying close to end markets.

04 Energy Storage: The Overlooked Growth Engine

While global attention focuses on the EV battery battle, Korean firms are quietly making strides in a relatively overlooked arena: the Energy Storage System (ESS) market. LFP batteries are showing unique advantages in emerging applications like AI data centers and renewable energy integration.

IEA data predicts global ESS will reach 180 GWh in 2025, with LFP batteries accounting for over 75%. Unlike EVs, which prioritize energy density, ESS values cycle life, safety, and total cost of ownership.

Korean companies possess notable first-mover advantages in this field:

1. Strong technology transfer capability: Applying thermal management and system integration expertise from the EV battery sector to ESS.

2. Premium market positioning: Targeting high-value segments like large-scale industrial storage and grid-side frequency regulation.

3. Global service network: Utilizing existing worldwide aftersales networks for full lifecycle ESS management.

"ESS will become one of the most important growth engines for Korean battery firms in the next five years," predicts Goldman Sachs in a recent report. "By 2030, ESS revenue could rise from under 10% to over 30% of total revenue for the top three Korean battery makers."

05 The Chinese Supply Chain: Dialectics of Cooperation and Competition

Confronted with China's absolute dominance in the LFP supply chain, Korean battery firms have adopted a complex strategy of "selective cooperation, strategic competition."

In raw materials, LG Energy Solution has signed long-term supply agreements with Chinese firms like Huayou Cobalt and CNGR to secure LFP precursor supply. In production equipment, Samsung SDI collaborates with Chinese manufacturers like Hirotec and Yinghe Technology for the latest stacking and formation equipment.

Yet, competition remains fierce in core technology and end markets. Korean firms are accelerating LFP-related patent filings, with applications in the US, EU, Japan, and Korea growing over 200% year-on-year in the first three quarters of 2025.

"We are witnessing a process of technological democratization," writes a UBS analyst. "LFP is no longer a monopolized technology. The global innovation race has just begun."

The transformation of South Korea's battery industry towards lithium iron phosphate batteries paints a complex picture of global high-tech industry competition. This is no longer a simple technological catch-up but a multidimensional game involving technology choices, geopolitical adjustments, supply chain restructuring, and market repositioning.

In R&D centers in Seoul, engineers test next-generation LFP materials; in factories in Georgia, automated production lines are being calibrated; in meeting rooms in Brussels, trade experts study the latest battery regulations. These simultaneous scenes reflect the comprehensive efforts of Korean battery firms to adapt to industry transformation.

Can LFP fuel a Korean battery comeback? Perhaps the answer is no longer the point. What truly matters is the strategic resilience and adaptability displayed by these firms in the face of a historic energy transition. This capability may be more valuable than any single technological breakthrough.

The market will deliver its verdict. But until then, Korean battery firms have made their choice clear: embrace change, confront competition, and find a new positioning at this industry inflection point.