U.S.-ROK Cooperation in the Battery Sector

EXECUTIVE SUMMARY

MAIN ARGUMENT

In the first section, Charlie Vest examines how U.S. trade and investment policies aimed at reducing supply chain dependence on China are shaping the market for Korean battery makers. Korean battery companies are the largest investors in the U.S. supply chain for electric vehicle (EV) batteries, with Chinese players increasingly locked out of the U.S. However, upstream dependence on China for critical raw materials remains high, and these dependencies are now at the center of China’s retaliatory response to U.S. technology controls. In the second section, Sangmin Shim examines the global battery industry’s rapid growth, driven by EV expansion and decarbonization goals, which highlights the strategic importance of U.S.-ROK collaboration. South Korea, a global leader in lithium-ion batteries, leverages R&D in solid-state and ecofriendly technologies, recycling, and supply chain diversification. The U.S., with its robust EV market and policy incentives, offers Korean companies opportunities to establish localized production, integrate supply chains, and access critical raw materials. Collaborative efforts include partnerships with automakers, research institutions, and recycling firms, advancing innovation and sustainability.

POLICY IMPLICATIONS

• Collaborative R&D initiatives between the U.S. and South Korea can accelerate breakthroughs in emerging battery technologies, such as solid-state and lithium-sulfur batteries. Establishing joint innovation hubs and government-funded projects with shared intellectual property rights would not only enhance technological advancements but also strengthen bilateral ties.
• Enhancing supply chain security through joint investments in critical mineral sourcing and advanced recycling facilities is essential. Bilateral agreements for shared material processing and stockpiling, coupled with expanded North American recycling initiatives, can reduce reliance on volatile global supply chains.
• By setting unified international standards for battery safety, performance, and recycling, the U.S. and South Korea can lead the global battery industry. Mutual recognition of certifications and co-developed regulatory frameworks for next-generation technologies will simplify market access and streamline innovation.
• The Inflation Reduction Act provides a strong foundation for promoting EV manufacturing in the U.S., while addressing national security risks posed by suppliers from countries of concern. Repealing or weakening this legislation would reduce U.S. leverage in attracting foreign investment in battery manufacturing from allied countries.

Charlie Vest is an Associate Director at Rhodium Group and a Nonresident Fellow at the National Bureau of Asian Research.

Sangmin Shim is a Professor in the Graduate School of Green Growth and Sustainability at the Korea Advanced Institute of Science and Technology (KAIST).