Ko Korea Secondary Battery Sector Loading... : Investor Sentiment and Bull/Bear Views

The three major battery makers swung to a quarterly operating profit for the first time in several quarters. High oil prices are reducing the EV affordability problem, helping demand. The sector is quietly bottoming out, presenting a recovery trade in secondary battery materials stocks.

Secondary batteries deserve close monitoring for a 2025 turnaround: next year's profit growth rate is expected to be the highest among major sectors, inventory destocking is underway (GM EV battery inventory declining, ESS mass production in the US absorbing capacity), lithium prices are edging up, and a potential Democratic win in the US midterm elections would boost sentiment for eco-friendly sectors. The sector is large enough to replace semiconductors as a leader later, but the timing is not immediate — watch for confirmation.

When semiconductor leaders correct, beaten‑down KOSDAQ sectors such as secondary batteries and pharma/bio experience sharp short‑covering rallies. These bounces are temporary and trap retail investors who mistake them for a bottom. The underlying fundamentals and rotation dynamics are not supportive. Do not chase these rebounds.

Interest rate-sensitive sectors such as pharmaceuticals/biotech, secondary batteries, and growth stocks should be avoided now because the global rate environment is turning unfavorable. Central banks are hiking or hawkish, making it hard for bond yields to fall. As a result, these sectors are under structural selling pressure; any bounces are not real rotation but liquidity-driven and should be used to exit.

Korean secondary battery stocks have further upside as the most pessimistic assumptions are improving. Global EV sales are turning positive, Tesla volumes are recovering, and ESS profitability is rising faster than expected, reopening the upside for the entire battery sector.

EV demand remains weak, but the speaker believes robots and physical AI will fill the battery-demand gap. Solid-state batteries are the focus because higher energy density lets robots work longer on the same weight, directly improving economics; humanoid battery needs are large (Atlas needs over 11 kW with spare packs, while a Tesla Model 3 uses about 60 kW, so five to six humanoids can equal one EV; Musk has cited about 240 TWh of future battery need versus only about 3 TWh produced so far). If solid-state commercialization progresses, the secondary-battery rally could be much larger than the EV-led cycle, so the sector is worth investing in.