Several South Korean battery companies are postponing or abandoning joint projects with Chinese partners, as geopolitical risks and shifting market dynamics reshape industry strategies.
LG Energy Solution has delayed its planned battery recycling venture with Huayou Cobalt, China’s top cobalt producer. The project, intended to include pre-processing and post-processing facilities in Nanjing and Quzhou, was originally scheduled to begin construction in late 2023, with operations expected by the end of 2024. However, construction has yet to begin. While LG maintains its recycling partnership with Huayou, the company confirmed that plans have been revised in response to changing market conditions.
In a separate development, SK On, EcoPro, and China’s GEM have scrapped their proposal to form a joint venture, GEM Korea New Energy Materials. The group had planned to invest roughly $834 million to build a precursor plant with an annual capacity of 50,000 tonnes in South Korea’s Saemangeum industrial zone. EcoPro cited a lack of business viability due to various market variables. No financial losses were reported as the venture was halted prior to corporate formation or construction.
The U.S. Inflation Reduction Act and Foreign Entity of Concern regulations are influencing these decisions. Under current rules, joint ventures with over 25% Chinese government-linked ownership risk disqualification from U.S. electric vehicle tax credits. These constraints have prompted companies to reevaluate their partnerships with Chinese entities.
POSCO Holdings has also put on hold a planned nickel joint venture for secondary batteries with China’s CNGR. Instead, it is focusing on lithium supply and reinforcing existing operations. Separately, LG Energy Solution has delayed its lithium iron phosphate (LFP) cathode project in Morocco with a Huayou Group affiliate, now targeting 2027 instead of the previously announced 2026 launch.
