Battery Association Chairman Eom Gicheon: "Will Push for Direct Refunds of Production Tax Credits So Loss-Making Companies Can Also Get Support"

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Eom Gicheon, chairman of the Korea Battery Industry Association and CEO of POSCO Future M, said the association would push to introduce a direct refund system so that companies operating at a loss can also benefit from the domestic production incentive tax credit being pursued by the government. On the state of Korea’s battery industry, he said signs of a recovery were emerging, supported by a booming energy storage system (ESS) market and growth in Europe’s electric vehicle market, but that more time would be needed for the benefits to reach materials and component makers.

Uhm Gicheon, chairman of the Korea Battery Industry Association and CEO of POSCO Future M, speaks with reporters at the 6th Battery Industry Day event at Josun Palace Hotel in Gangnam-gu, Seoul, on the 29th. Photo by Jang Bokyeong

Speaking with reporters on the 29th at the 6th Battery Industry Day event held at the Josun Palace Hotel in Gangnam-gu, Seoul, Chairman Eom said, “The introduction of the domestic production incentive tax credit is good news and a meaningful step forward for the secondary battery industry.” He added, “Many member companies are still operating at a loss, so the association will take the lead in working to ensure they can receive direct support.”

The domestic production incentive tax credit provides tax credits for products manufactured in Korea. However, companies that are operating at a loss and therefore do not pay corporate income tax face the limitation that they cannot immediately benefit from the tax credits.

Chairman Eom said, “Some of the three cell makers are turning a profit, but many member companies, including small businesses, are still operating at a loss.” He added, “The association is also giving considerable thought to options such as a direct refund system.” He continued, “As the issue of a direct refund system has recently been raised in the National Assembly, we will work with the Assembly and the Ministry of Trade, Industry and Energy to ensure that our member companies receive meaningful support.”

He offered a cautious outlook on the state of Korea’s battery industry, noting that while cell makers had begun to see improved results in the second and third quarters of this year, materials and component makers continued to face difficulties.

“Once cell makers start turning a profit, the positive effects will reach their downstream suppliers as well, but that will take time,” Chairman Eom said. “It is difficult to say that the battery industry has fully recovered yet.”

However, he pointed to growth in the ESS market and a recovery in Europe’s electric vehicle market as positive factors. “Although the U.S. electric vehicle market went through a chasm, the boom in the ESS market, driven in part by AI data centers, has helped Korea’s battery industry,” he said. “With Europe’s market growing by 20-30% or more, we expect cell makers’ profits to gradually improve.”

He identified shipments, factory utilization rates and order performance as key indicators for assessing a recovery in the industry. “In manufacturing, shipments and utilization rates ultimately translate into corporate profitability,” Chairman Eom said. “Order performance, which will lead to supply in two to three years, gives us a view of the future of the secondary battery industry.”

On POSCO Future M’s performance next year, he said, “Projects by automakers that had been suspended or put on hold due to the electric vehicle chasm began to resume in the second half of last year.” He added, “From the second half of last year through now, POSCO Future M has signed long-term supply agreements (LTAs) for a total of about 1.5 million tons of cathode materials.”

He continued, “If we sign an additional two to three contracts by the end of the year, another 1.2 million tons will be added, bringing the total order volume to 2.7 million tons.” He forecast, “Supply could begin as early as the second half of next year, boosting shipments and utilization rates, and utilization rates and sales volumes will increase in earnest from 2028.”

Regarding controversy over the association’s internal management that arose this year, he said it would pursue organizational reforms next month based on the findings of an assessment by an outside organization.

“As chairman of the association, I take this matter very seriously, and we need to completely transform the organization for the sake of our member companies,” Chairman Eom said. “We have been conducting an organizational assessment through an independent third-party organization for about two to three months.”

He added, “We will accept the findings and deal with the matter in accordance with our principles, including organizational restructuring and a fair review of what was done right and wrong.” He continued, “We expect to have comprehensive results around November.” He also said, “The matter was raised during the parliamentary audit, and the Ministry of Trade, Industry and Energy is also conducting an inspection, so we will have an opportunity to explain the findings as a whole.”

About 250 people from the government, the National Assembly, industry, academia and research institutions attended the event, including Lee Minwoo, director general of the Industry Growth Office at the Ministry of Trade, Industry and Energy; independent Assemblyman Kim Jongmin; LG Energy Solution Executive Vice President Song Chungseop; Samsung SDI Executive Vice President Jung Taeyoung; and SK On Vice President Shin Youngki.

At the awards ceremony recognizing contributions to the development of the battery industry, Lee Kangmyeong, CEO of SungEel HiTech, received the Silver Tower Order of Industrial Service Merit. Lee was recognized for pioneering Korea’s first recycling business for used lithium-ion batteries and leading the localization and commercialization of technologies to recover critical minerals, including cobalt, nickel and lithium.

Choi Moonho, CEO of EcoPro BM, received the Industrial Service Medal for contributing to the localization of high-nickel cathode materials and the development of the export industry. Shin Youngki, a vice president at SK On, received a Presidential Commendation for expanding the adoption of domestically produced equipment and diversifying the supply chains for key materials while establishing global battery production bases.

In addition, Prime Minister’s Commendations and Ministry of Trade, Industry and Energy Minister’s Commendations were presented to 17 individuals for their contributions to the development of the battery industry, technological innovation and increased exports.

This content was produced with the assistance of AI translation services.