Samsung SDI's headquarters in Yongin, Gyeonggi Province / Courtesy of Samsung SDI

Korean electric vehicle (EV) battery manufacturers are aiming to maintain cost-reduction measures in 2025, driven by a continued skeptical outlook regarding their business prospects.

According to industry officials, Thursday, Samsung SDI informed its battery division's employees and back office workers that they would not receive "overall performance incentives (OPIs)." OPIs are one of Samsung Group's various types of bonuses, given once a year when a business division's annual profit exceeds the initial goal set at the beginning of the year.

Employees in Samsung SDI's electronic materials division will reportedly receive OPIs equivalent to 3 to 5 percent of their annual wages.

A year earlier, the affiliate of Samsung Electronics provided its battery division employees and back office workers with OPIs equivalent to 32 percent and 28 percent of their annual wages, respectively. OPIs equivalent to 18 percent of annual wages were paid to its electronic materials division employees.

"This year, the business environment is expected to become more challenging due to rising uncertainties surrounding a second Trump administration, and ongoing political instability globally," Samsung SDI CEO Choi Joo-sun said in his New Year's address.

Choi, who replaced former CEO Choi Yoon-ho after the company's end-of-year executive reshuffle, also called on employees and executives to "eliminate unnecessary processes and improve efficiency."

The company's latest belt-tightening measure came after its rivals declared emergencies last year.

Last month, LG Energy Solution (LGES) ordered its executives to fly economy class when traveling less than eight hours and its employees to opt for teleconferences, as part of efforts to reduce the costs for business trips, which amount to 100 billion won ($68 million) every year.

While encouraging its employees to use up their annual leave, the subsidiary of LG Chem also decided to reduce incentives and halt recruitment.

"As it is very difficult to create significant profits this year, short-term cost-reduction measures are essential," LGES CEO Kim Dong-myung said in his New Year's address, anticipating that the EV market will see recovery in 2026 at the earliest.

SK On initiated its first-ever voluntary redundancy program and started offering unpaid leave last September.

After abolishing two of five C-level executive positions in July, the subsidiary of SK Innovation also appointed former SK hynix R&D chief Pi Seung-ho as the manufacturing head after the end-of-year executive reshuffle, in order to share the expertise of the lucrative semiconductor affiliate.

"Instead of waiting for the EV market's recovery and other external factors, we should concentrate more on strengthening our capabilities," SK On CEOs Yu Jeong-joon and Lee Seok-hee said in their New Year's address.

Securities analysts presumed both LGES and SK On had suffered operating losses during the fourth quarter of 2024, while Samsung SDI had experienced its first operating loss in three years from its EV battery business.

"LGES appears to have suffered an operating loss of 258.4 billion won during the fourth quarter, worse than the market consensus of 118 billion won," NH Investment & Securities analyst Ju Min-woo said, citing the slower-than-expected demand in the European market.

Analysts also attributed SK On's first-ever quarterly profit during the third quarter of 2024 to its cost-reduction efforts, expecting the company to start making a profit later this year after posting an operating loss of around 200 billion won for the fourth quarter of last year.

Samsung SDI is presumed to have suffered an operating loss from its EV battery business during the fourth quarter of 2024, according to iM Securities analyst Chung Won-suk, who estimated the tech firm's entire fourth-quarter operating profit at 5 billion won, down 99 percent year-on-year.

"The company is expected to post 18.8 trillion won in sales and 890 billion won in operating profit in 2025," the analyst said.