South Korea’s battery triumvirate, LG Energy Solution, Samsung SDI, and SK On, has apparently discovered what fiscal restraint looks like. After years of throwing capital around like confetti at a wedding, these giants are now clutching their wallets with both hands. The US electric vehicle market, once the promised land of endless growth, has turned into something closer to a cautionary tale.
LG Energy Solution is cutting capital expenditures by over 40% this year. That’s not a typo. The company that spent 1.25 trillion won in 2024 is now pivoting to what executives euphemistically call “cash flow management and financial structure stabilization”. Instead of building shiny new factories, they’re retrofitting existing EV battery plants for energy storage systems. It’s the industrial equivalent of turning your failed restaurant into a storage facility.
Samsung SDI is following suit, slashing investments to focus exclusively on a Hungarian plant and some lithium iron phosphate retrofitting in the US. After ramping up from 260 billion won in 2022 to 660 billion won in 2024, last year they cut spending by 50%. This year? Even less.
SK On’s trajectory is perhaps the most dramatic. From 750 billion won in 2024 to a projected 130 billion won this year. That’s an 83% reduction, the kind of number that makes CFOs either heroes or scapegoats depending on how the next quarters unfold.
The culprit isn’t hard to identify. The Trump administration’s termination of the $7,500 tax credit for new EV buyers last September turned the US market into a graveyard of optimistic projections. North American EV sales dropped 4% last year while China and Europe surged by 17% and 33% respectively. That’s 1.8 million vehicles in a market these companies bet billions on.
An industry official put it bluntly: “Three or four years ago, they expected growth in the US EV market”. Now they’re learning to make do with what they’ve already built rather than throwing good money after bad. It’s a lesson in the difference between a market and wishful thinking.
