South Korean battery makers will respond to slower growth in the global electric vehicle (EV) industry by making workforce adjustments at their international production bases.

SK on Co. is set to implement furloughs and reduce production at its Georgia plant in the United States due to falling demand for EVs amid the global economic downturn. SK Battery America (SKBA), SK on’s U.S. subsidiary, stated that the temporary measures aim to align the workforce and production lines with the current pace of the EV market. The company operates two plants in Georgia with a combined annual capacity of 21.5 GWh, representing a total investment of 3.5 trillion won ($2.6 billion).

Acknowledging the slowdown in the EV market, SKBA spokesperson Joe Guy Collier emphasized that the decision is temporary.

“SKBA will not be stopping production,” he said. “We made the decision as a part of our efforts to optimize line operations and workforce management with flexibility as the EV industry is adjusting its pace of growth.”

Similar workforce adjustments are occurring across the industry as companies revise their investment plans in response to slower growth in EV demand. LG Energy Solutions Ltd. recently laid off 170 field workers in Michigan, constituting a reduction of over 10 percent of the plant’s workforce. The company cited the ongoing expansion of its Michigan plant and the need to streamline operations as reasons for the layoffs.

Market research from SNE Research also indicated a notable slowdown in EV sales growth, with 9.67 million units sold globally in the first nine months of 2023, or a 36.4 percent increase from the same period last year. This contrasts sharply with the 109 percent year-over-year growth in 2021 and 56.9 percent in 2022.

“As the local production workforce comprises many skilled workers with extensive experience, employee layoffs reflect a challenging situation for the battery industry,” a source familiar with the battery industry said.

LG Energy Solutions’s recent scrap of its plan to build a battery plant in Turkiye, in collaboration with Ford Motor Co. and Turkiye Koc Holding, further underscores the industry’s cautious approach to expansion amid sluggish demand. Industry experts predicted that a recovery may not occur until at least the first half of 2024, citing factors such as high interest rates.

By Jung You-jung, Song Min-geun, and Han Yubin

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