As of 3:15 p.m. Friday, Ecopro jumped 5.6 percent to 85,100 won ($59), extending its surge amid renewed optimism in the battery sector. LG Energy Solution rose 4.8 percent to 465,500 won, supported by sustained institutional buying across major battery makers. Isu Chemical soared by the KOSDAQ’s daily limit of 30 percent to 12,690 won, emerging as one of the index’s top performers on heavy speculative trading.
The rally is powered by multiple tailwinds. Global EV sales hit a record 2.1 million units last month — up 26 percent year-on-year — beating market expectations and restoring confidence. Meanwhile, ESS demand tied to AI infrastructure has become a major growth driver. Analysts estimate U.S. installations could reach 120 GWh, growing 25 percent annually, as AI data centers require massive batteries to stabilize power use — with ESS margins often higher than those of EV batteries.
Adding to the hype, China’s Chery unveiled a 600 Wh/kg solid-state battery prototype on Oct. 18 — nearly double the current lithium-ion density — targeting commercialization by 2027. That lifted sentiment toward Korean suppliers in the solid-state supply chain. Short covering has further amplified gains, with L&F’s short interest reaching 25 percent of float, triggering forced buying.
But beneath the euphoria, structural weaknesses persist. Korean battery makers’ utilization rates remain at 40–50 percent, far below the 90 percent achieved by China’s CATL and BYD. Their heavy bet on high-end NCM batteries backfired as Chinese rivals dominated the mass market with cheaper LFP technology. As a result, Korea’s global market share slipped to 16.4 percent in the first half of 2025, down 5.4 points year-on-year, while Chinese firms seized 49.7 percent in Europe — overtaking Korea for the first time.
The slowdown has shown in earnings. LG Energy Solution’s operating profit plunged 73.4 percent in 2024, ending with a $430 million Q4 net loss. Samsung SDI posted its first quarterly deficit in seven years, prompting a 2 trillion-won rights issue, while SK On initiated workforce restructuring. The elimination of U.S. EV tax credits adds another headwind, echoing Europe’s experience — where EV sales fell 27.4 percent in Germany and 15.9 percent in Sweden after subsidy cuts.
Analysts now warn against chasing the golden moment. Shinhan Investment Securities described the surge as “rotation-driven rather than earnings-led.” Yuanta Securities’ Han Byung-hwa — famed for predicting the 2019 biotech crash — cautioned that battery-material valuations are “a bubble with no other way to describe it,” with price-to-sales ratios averaging 9.9× versus 1.1× for cell makers.
The three Ecopro affiliates now account for 16 percent of total KOSDAQ market capitalization, up from 4 percent at the start of the year. LS Securities’ Jung Kyung-hee noted that “while investor interest in battery stocks is surging alongside the KOSPI rally, demand growth is slowing.” She added that Korean firms remain overvalued relative to global peers, with EV recovery still fragile and China-centric — leaving much of the upside likely to flow to Chinese suppliers expanding aggressively in Europe.
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