South Korean batteries are at the intersection of EV, ESS, and humanoid robot demand

Overview

This is a Morgan Stanley Asia Summer School investor presentation on South Korean batteries. The material is organized around three demand themes: long-term growth and regional differences in EV batteries, demand expansion for ESS driven by AI and policy, and the long-term battery demand potential created by humanoid robots. The report also supplements the discussion with cathode cost and key raw material price trends, and lists rating information for related covered South Korean energy, materials, automotive, and shared mobility companies in the disclosure section.

Core views

The core view is that the South Korean battery industry still has structural demand opportunities, but the drivers are expanding from standalone EV growth to multiple scenarios including EV, ESS, AI data centers, and humanoid robots. European regulation continues to support EV demand, U.S. BEVs remain under pressure after the rollback of tax credits, and the expansion of Chinese battery makers in Europe creates competitive pressure. ESS demand is supported by AI and government policy, while humanoid robots represent a more distant, more uncertain, but potentially very large new source of demand.

Analysis framework

The report uses a thematic presentation and scenario analysis approach, breaking down battery demand across EV, ESS, and humanoid robot applications, and supporting its argument with charts on regional TAM, monthly BEV sales trends, major customer sales trends, U.S. ESS cell demand forecasts, the global humanoid robot market size, and cathode cost trends.

Methodology notes

• Market size analysisTAM

  total addressable market

  The report uses the TAM framework to assess long-term market potential for EV batteries and humanoid robots, focusing not on short-term earnings forecasts for individual companies but on demand ceilings and regional structure.

• Demand trackingMonthly sales trends

  BEV sales trend tracking

  The report tracks monthly BEV sales globally, in the U.S., Europe, and China to judge regional demand momentum, policy shocks, and customer-side battery installation trends.

• Cost analysisCathode cost trend

  cathode cost trend

  The report incorporates key raw material prices and cathode cost trends into the analysis to observe how cost-side changes in the battery supply chain affect margins and competitiveness.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• LG Energy Solution

  One of the core names in the South Korean battery supply chain; the report discloses an Equal-weight rating.

  Strengths

  Benefits from expanding EV and ESS battery demand, and the material mentions customer sales trends such as GM EV sales and Honda Prologue.

  Weaknesses

  The disclosed Equal-weight rating implies that its expected risk-adjusted return versus the industry coverage universe is not in the most positive tier.

  Comparison

  Relative to Samsung SDI’s Overweight, LG Energy Solution is rated Equal-weight in the disclosure table.

  Risks

  Pressure on U.S. BEV sales, expansion of Chinese battery makers in Europe, and volatility in raw materials and cathode costs.

• Samsung SDI

  One of the covered South Korean battery names, with an Overweight rating disclosed in the report.

  Strengths

  May benefit from growth in premium batteries, EV, ESS, and long-term expansion in new applications.

  Weaknesses

  The report excerpt does not provide company-level earnings forecasts or a target price, so earnings sensitivity cannot be independently verified.

  Comparison

  Its disclosed rating is higher than the Equal-weight ratings for LG Chem, LG Energy Solution, and SK Innovation.

  Risks

  Volatility in end-market EV demand, customer sales coming in below expectations, changes in material costs, and intensifying competition.

• SK Innovation Co Ltd

  One of the covered South Korean energy and battery-related names, with a disclosed Equal-weight rating.

  Strengths

  Overall demand growth across the South Korean battery chain may provide industry beta.

  Weaknesses

  Company-specific supporting arguments are limited in the report excerpt, and the rating is Equal-weight.

  Comparison

  Equal-weight along with LG Energy Solution and LG Chem; below Samsung SDI’s Overweight.

  Risks

  Pressure on U.S. BEV sales, policy changes, competition, and cost volatility.

• South Korean battery industry

  The core research subject of the report.

  Strengths

  Long-term EV growth, regulatory support in Europe, ESS and AI data center demand, and long-term TAM from humanoid robots.

  Weaknesses

  BEV sales are under pressure after the rollback of U.S. tax credits, and some demand scenarios rely on long-term assumptions.

  Comparison

  Compared with Chinese battery makers, South Korean manufacturers face share expansion pressure in Europe; compared with the traditional EV-only narrative, ESS and robots provide additional growth narratives.

  Risks

  Policy rollback, regional demand divergence, Chinese competition, raw material price and cathode cost volatility, and uncertainty around the realization of long-term robot demand.

Key data

• Report date2026-07-20 03:24 AM GMTThe cover page shows the Morgan Stanley Research publication date.
• U.S. ESS cell demandIncrease of about 57GWh in 2025, projected to reach 279GWh by 2030This demand scenario is shown in the title on page 13 of the report.
• Long-term global humanoid robot market2050e 1 billion units in operation, US$7.5tn TAMThis long-term market scenario is shown in the title on page 17 of the report.
• Humanoid robot battery demandApproximately 2GWh/120GWh/650GWh in 2030/2040/2050, respectivelyThe original title states 2030/2040/2025; based on context it may refer to 2050, and the figure is retained for directional reference.
• LG Energy Solution373220.KS，Equal-weight，价格 W334,000The disclosure table shows a rating date of 2025-04-03 and a price date of 2026-07-16.
• Samsung SDI006400.KS，Overweight，价格 W434,500The disclosure table shows a rating date of 2026-04-28 and a price date of 2026-07-16.

Impact & implications

The investment research implication is that the valuation and earnings sensitivity of South Korean battery companies should not be judged solely by near-term EV sales. It is also necessary to track regional policy, customer vehicle sales, ESS orders and AI data center demand, humanoid robot commercialization progress, and changes in material costs. Short- to medium-term variables are concentrated in European demand support, the impact of U.S. policy rollback, and Chinese competition; long-term variables lie in whether ESS and humanoid robots can form new battery demand curves.

Risks

• BEV sales may remain under sustained pressure after the U.S. EV tax credit sunset.
• Chinese battery makers may continue to expand their share in Europe, squeezing growth room or pricing power for South Korean manufacturers.
• Changes in the European regulatory path or relaxation of CO2 emissions targets may alter the pace of EV demand.
• Volatility in cathode materials and key raw material prices may affect battery costs and margins.
• ESS and humanoid robot demand forecasts are long-term scenarios, and commercialization may progress more slowly than expected.
• The report excerpt is mainly based on presentation material and chart titles, and lacks a complete financial model and target prices for individual companies.

What to watch

• Monthly BEV sales trends globally, in the U.S., Europe, and China.
• The speed of demand recovery after the rollback of U.S. EV tax credits.
• Changes in European CO2 regulation, subsidies, and localization policies.
• Market share changes and pricing strategies of Chinese battery makers in Europe.
• U.S. ESS cell demand, data center energy storage orders, and the strength of government policy support.
• Humanoid robot shipments, battery capacity per unit, and progress in battery supply chain certification.
• Prices of key raw materials such as lithium, nickel, and cobalt, as well as cathode cost trends.
• The latest ratings, prices, and customer order changes for covered companies such as LG Energy Solution, Samsung SDI, SK Innovation, and LG Chem.