Global new vehicle sales are forecast to reach 100 million in 2027, up 1.3%, while US battery electric vehicle sales are expected to fall 10% to 870,000.
US BESS installation demand is forecast to rise 28.7% to 80.6GWh, with data center-linked demand increasing from 1.9GWh to 12.1GWh.
Korea's three battery cell manufacturers have approximately 200GWh of North American energy storage orders outstanding, securing substantial volumes through at least 2028.
European battery electric vehicle sales are forecast to grow 20% to 4.23 million, with carbon regulations and restrictions on Chinese imports potentially affecting non-Chinese supply chains.
US vehicle and energy storage demand forecasts
As electric vehicle growth slows, data centers are emerging as a new source of growth for rechargeable batteries. Global automobile market growth is expected to remain in the 1% range in 2027, and US electric vehicle sales are forecast to decline. However, the US energy storage system (ESS) market is expected to grow by nearly 30%, supported by electricity demand from artificial intelligence (AI) data centers.
For Korean rechargeable battery manufacturers that have relied heavily on automotive batteries, this would mean a shift in the main source of growth from electric vehicle sales to electricity infrastructure. In particular, Korean battery cell manufacturers have already secured substantial North American ESS order backlogs. Whether those orders translate into actual shipments and earnings from 2027 is expected to be a key factor in a sector recovery.
According to Daishin Securities' automotive and rechargeable battery industry outlook on October 21, global new vehicle sales in 2027 are expected to reach approximately 100 million, an increase of just 1.3% year on year. Sales are forecast to increase 1.2% to 33.44 million in China, 0.9% to 16.66 million in the United States and 2.2% to 10 million in major European countries, making a strong demand recovery across the automobile market difficult to expect.
Trends in the market for environmentally friendly vehicles are also expected to differ sharply by region. Global battery electric vehicle (BEV) sales are forecast to grow 11% to 17.08 million, but US sales are expected to fall 10% to 870,000. In the United States, a shortage of new models and an expanding supply of used electric vehicles are limiting the recovery in demand. Hybrid electric vehicle (HEV) sales, by contrast, are forecast to increase 4% to 2.83 million, supported by their ability to reduce fuel costs without requiring charging.
The ESS market presents a very different outlook. US battery energy storage system (BESS) installation demand is expected to increase 28.7% year on year to 80.6GWh in 2027. Installed power capacity is forecast to rise 20.2% to 24.9GW, while average storage duration increases from 3.0 hours to 3.2 hours. As a result, the actual volume of batteries required is expected to grow faster than power capacity.
Data centers are the fastest-growing source of demand. US BESS demand linked to data centers is forecast to expand more than sixfold, from 1.9GWh in 2026 to 12.1GWh in 2027, while its share of total BESS demand rises from 3% to 15%. The forecast assumes that new data center capacity increases from 13GW to 17GW and that the BESS adoption rate at data centers rises from 4% to 18%.
Unlike ordinary manufacturing facilities, AI data centers require a stable electricity supply 24 hours a day. When the grid cannot deliver the required electricity on time, or renewable generation fluctuates throughout the day, ESS facilities that store electricity in large batteries and supply it when needed take on a greater role.
Data centers' own electricity consumption is also rising rapidly. The rapid increase in accelerated servers used for AI computing is making it difficult for existing grids alone to meet electricity demand. Projects that incorporate ESS facilities when connecting power generation facilities with data centers are becoming more likely.
Korean manufacturers' orders and production capacity
Existing order backlogs are a strength for Korean battery manufacturers. The three Korean battery cell manufacturers' North American ESS order backlogs are estimated at approximately 200GWh as of the end of 2025. Given that contracts generally provide for deliveries over 2 to 3 years, the analysis suggests that substantial volumes are secured through at least 2028 at current production capacity.
ESS production capacity is also being expanded. LG Energy Solution's ESS production capacity is expected to increase from 30GWh in 2025 to 73GWh in 2027, with North American capacity rising from 20GWh to 62GWh. Samsung SDI's total ESS production capacity is also forecast to increase from 21GWh to 43GWh over the same period, while North American capacity expands from 8GWh to approximately 30GWh.
Consequently, 2027 is likely to be the first year in which ESS orders translate into financial results. Battery manufacturers have restrained aggressive capital spending in response to slowing electric vehicle demand since 2022. If ESS demand increases as expected, profitability improvements from higher utilization could emerge before excess capacity becomes a burden.
European demand and battery materials pricing
Weakness in the US electric vehicle market does not mean the entire automotive battery market is declining. Global automotive battery demand is forecast to increase approximately 12% year on year to 1,492GWh in 2027, with China and Europe expected to lead growth.
European automotive battery demand, in particular, is forecast to rise 16% to 326GWh. European BEV sales are also expected to increase 20% to 4.23 million, with their market share reaching 30%, making a different trend from that in the United States highly possible.
Regulatory changes in Europe are also putting pressure on automakers to increase electric vehicle sales. As the compliance assessment approaches for carbon emissions regulations applied on an average basis over 2025 to 2027, automakers that fail to meet the standards must either increase electric vehicle sales further or purchase credits.
Discussions about import restrictions on Chinese-made hybrids and plug-in hybrids are another variable. If the measures under discussion are implemented, an initial annual quota of approximately 350,000 Chinese-made PHEVs and HEVs could apply in 2027, potentially slowing Chinese manufacturers' sales growth in Europe. However, the specific legal implementation mechanism and country allocation criteria have not yet been finalized, so the actual effects will need to be assessed as the rules are developed.
In that case, automakers and battery supply chains with European production bases could become more valuable. Automakers producing electric vehicles in Europe may increase sales to comply with carbon emissions regulations. If regional sourcing requirements are also tightened, non-Chinese battery manufacturers with local production capacity could gain a relative advantage.
Battery materials manufacturers, however, continue to face pressures through the first half of 2027. Lithium, nickel, cobalt and manganese prices, which rose in the first half of 2026, have fallen approximately 28%, 24%, 9% and 5%, respectively, from their peaks. This increases the likelihood that lower selling prices will take effect before expensive inventories are used in production.
This means that cell manufacturers can raise utilization by expanding ESS shipments, while materials manufacturers could face both lower selling prices and the burden of existing high-cost inventories even if shipment volumes recover. Consequently, early in 2027, earnings visibility could be relatively higher for cell manufacturers with actual ESS order backlogs and production capacity than for materials manufacturers.
This is why the rechargeable battery industry's outlook for 2027 is difficult to assess from electric vehicle sales alone. In the United States, ESS demand is expected to grow rapidly as BEV sales decline. In Europe, electric vehicle regulations and localization policies are putting pressure on manufacturers to expand sales, creating very different markets depending on region and application.
Ultimately, a recovery among Korean battery manufacturers is increasingly likely to depend on how quickly they convert their existing North American ESS orders into revenue and earnings, rather than on when electric vehicle sales recover. This suggests that 2027 could be the year when AI data centers and electricity grids become the next major source of growth for Korea's rechargeable battery industry, which began with automotive batteries.
Original Korean article: thepowernews.co.kr
English brief by Korea Wind Intelligence, koreawindintel.com
