SK Innovation announced that its lithium-ion EV battery business was officially spun off on October 1, 2021 and has become a wholly-owned subsidiary, named SK On.

The move was announced in August (it received an 80.2% approval rate in September) and basically mirrors what LG Chem did with its battery business - currently the LG Energy Solution subsidiary.

"The new corporate name for the battery business, ‘SK On’ has a double entendre referring to ‘turning ON’ and ‘going ON.’ The corporate name encapsulates SK On’s will to take a big step towards becoming the No. 1 company in the global battery industry."

"SK On has kicked off as a battery business division of SK Innovation and is based on the company’s accumulated battery researches dating back to the early 1990s. Since 2017 when it started to expand the investment, it has shown rapid growth with more than double the year-over-year growth rate."

According to the company, an independent battery manufacturer is a better solution both from the management standpoint and financing the capital-intensive growth (possibly through IPO or other forms).

SK On CEO Jee Dong-seob stated:

“SK On will provide the market with the safest, fastest, and most durable and reliable products and services. To do so, we will establish an independent management system that is capable of promptly responding to market changes and keep on rising as an undisputed leader in the global EV battery industry by bolstering our business expertise and global competitiveness."

Order backlog has well-exceeded 1,000 GWh

SK On has received orders for more than 1,000 GWh of battery cells and intends to quickly increase its production from about 40 GWh annually currently to over 500 GWh by 2030.

  • 2021: about 40 GWh
  • 2023: 85 GWh
  • 2025: 220 GWh (this target was already increased a few times from 125 GWh, 190 GWh, and 200 GWh)
  • 2030: over 500 GWh

On top of that comes joint venture deals with Ford (129 GWh - 3x 43 GWh), which will increase SK On's manufacturing capacity in the U.S. to 150 GWh annually.

"SK On intends to make the most out of this spin-off to advance the company as a leading global company by 2030. According to the plan, its current global battery production capacity of 40GWh per year will be expanded to 85 GWh in 2023, 220 GWh in 2025, and over 500 GWh in 2030. In addition, the company is making a remarkable stride as it recently committed to increase the scale of investment in a joint venture with Ford from 60 GWh to 129 GWh.

With the robust growth, the company’s present order backlog has well-exceeded 1,000 GWh, shooting it to the top of the industry.

Moreover, it plans to explore various new markets for batteries such as Energy Storage System (ESS), flying cars, and robots, while broadening its scope that includes not only battery products but also battery service expediting the drivers of new growth engines such as Battery as a Service (BaaS)."

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