Opportunities Arise for Korean Battery Makers Amid US Efforts to Diversify Defense Supply Chains
The United States is actively seeking to reduce its dependency on Chinese battery supply chains, extending these efforts beyond traditional sectors like electric vehicles and energy storage to encompass defense applications. This transition presents a promising avenue for Korean battery manufacturers, especially as the demand for electric vehicles shows signs of slowing.
During the recent Korea-US defense battery cooperation seminar at InterBattery 2026 in Seoul, the US Department of Defense expressed a strong interest in collaborating with Korea to standardize military-use batteries. This initiative aims to cut costs and enhance mass production capabilities.
Eric Shields, a senior battery advisor within the US Secretary of Defense’s office, highlighted the current diversity in battery types used in military systems, ranging from infantry gear and drones to submarines and space-based weaponry, amounting to over 5,000 different types. Shields emphasized, “Batteries should be standardized like ammunition and fuel,” and suggested that batteries such as 18650 cylindrical cells could significantly enhance interoperability.
China’s Predominance Sparks Urgent Action
The push to diversify supply chains is largely driven by China’s dominant position in battery manufacturing. Lisa King, director of advanced battery strategy at LEAP Manufacturing, noted that approximately 90% of cylindrical batteries for defense and electronics are produced in China, posing a significant risk to national security.
The focus initially lies on cylindrical batteries, especially the 18650 cells, due to their prevalent use in lighter military systems like radios and drones. However, US officials plan to extend standardization efforts to larger battery formats, including prismatic batteries for heavier military platforms.
Korean companies are well-positioned to benefit from this shift. Samsung SDI, for instance, holds a competitive edge in the cylindrical lithium-ion battery market, maintaining a prominent position in small-format cells for data centers and consumer electronics. As per their recent earnings call, they captured about 50% of the global market for battery backup units in Q4 of last year.
A senior researcher from a major battery firm highlighted that companies with existing cylindrical production capabilities have a cost advantage, as they can increase capacity without substantial new investments. He remarked, “Defense orders tend to be stable and placed in fixed volumes, meaning even relatively modest margins compared to EVs can be viable.”
Samsung SDI is also venturing into larger battery formats, co-developing a submarine-grade prismatic lithium-ion battery with Hanwha Ocean and Hanwha Aerospace, set for deployment between 2027 and 2028.
LG and SK Enhance Their Defense Sector Presence
Other Korean battery companies are also expanding their roles in the defense industry. LG Energy Solution, recognized for its performance in high-demand environments, supplies batteries for aerospace initiatives with NASA and SpaceX. It is also indirectly engaged in US defense electrification projects via GM Defense, which utilizes LG Energy Solution’s technologies to adapt EV platforms for military purposes.
GM Defense is reportedly involved in Pentagon-supported projects to evaluate EV batteries for directed energy systems, which focus on weapons utilizing concentrated energy, such as lasers. They are also participating in battery standardization initiatives.
SK On is providing high-nickel pouch batteries for unmanned systems by Hyundai Rotem and is in discussions with US and European defense firms to supply batteries for AI-enhanced submarines and electric vertical take-off and landing aircraft.
For Korean battery manufacturers, the defense sector offers a promising growth opportunity as EV market demand wanes. Unlike the highly competitive EV industry, defense contracts tend to be stable, long-term, and involve fixed volumes, which helps ensure predictable revenue.
An industry insider stated, “Excluding Chinese players, Korean battery makers are effectively Washington’s only viable alternative with both advanced technology and mass production capacity.” As the US accelerates its efforts to disconnect from Chinese suppliers, Korean battery firms find themselves increasingly central to a market driven by both national security and commercial imperatives.
Original Story at www.koreaherald.com