Seoul: South Korean battery giant, which powers much of the world’s electric vehicles, faces a skills shortage that could lead to a global race for zero-emissions transportation.
The country’s three major players, which account for a third of the global electric vehicle (EV) battery market, told Reuters they were all grappling with shortages of research and engineering specialists such as the demand for technology bubbles.
LG Energy Solution (LGES), SK On, and Samsung SDI Co. Ltd. is one of the top six battery manufacturers in the world and boasts Tesla, Volkswagen and Ford Motor Co.
However, they are faced with increasing demand from major auto manufacturers and cannot find sufficient technicians with the necessary training to further advance cutting-edge technologies such as solid-state batteries.
“While we are seeing such growth in the industry, we appear to be facing a talent shortage,” an LGES official said. “It’s very important to recruit outside talent and develop our own talent.”
This has been confirmed by its two main competitors, with SK On calling the sector’s expansion “exponential”.
In fact, the global battery sector has doubled in the past five years, and South Korea lacked nearly 3,000 college places in fields such as research and design at the end of 2020, according to the latest data from the Korea Battery Industry Association. LGES, SK On and Samsung SDI currently have a total of about 19,000 employees.
The Korean crisis reflects a growing skills shortage in the broader global battery market, which IHS Markit predicts will triple to nearly $90 billion by 2025.
For example, the European Union’s battery planning group said the bloc needed “retraining/upgrade” because its battery industry needed 800,000 new workers by 2025.
If the global skills gap is not closed, some industry experts could slow the progress of batteries, which are necessary for clean roads, one of the biggest sources of greenhouse gas emissions.
“Demand for talent in the battery industry exceeds supply, and battery manufacturers are working to ensure they have a small group of people who can work with this technology and don’t fall behind in a fast-growing market,” said Samsung Securities analyst Cho. Hyun-rul.
In a sign of pressure to compete, LGES, the No. 1 South Korea, plans to open a new “Smart Battery Factory Department” at the famous Korean University next spring with job guarantees for graduates.
Recently, executives have flown to the United States to lead recruitment events at schools. LGES CEO and manager traveled to Los Angeles last month while SK Innovation CEO and staff held an event in San Francisco on Saturday.
These companies compete not only with other established Asian players, including China’s market leader CATL and Japan’s Panasonic, but also with fast-growing American and European competitors such as Sweden’s Northvolt, who are filling the gap.
The skills shortage in South Korea is exacerbated by the fact that some existing employees are moving to foreign competitors who offer better salaries, according to two industry sources familiar with the matter. They declined to be named due to the sensitivity of the subject.
Northvolt, which Volkswagen reports as a customer, previously said some of its employees had been employed by leading battery manufacturers, including LGES and Panasonic.
“We have some people working for Northvolt who are from South Korea, which is definitely a very impressive country in terms of battery manufacturing and development with some of the leading companies in the area,” a company spokesman told Reuters last year.
“We try to offer competitive packages to our employees – for example, everyone who works here is a shareholder in the company,” he added, but did not provide any information about payments.
Battery specialists in South Korea who recently earned their PhD can earn up to 100 million won ($85,000) per year, and those without that skill level make an average of around 80 million after several years of experience, according to two sources from the South. Korean battery company.
The median annual salary in South Korea in 2019 was 37.4 million won, according to tax authorities.