SK Innovation, the South Korean conglomerate mostly focused on its Refining, Petrochem and Lubricants divisions, reports strong financial results for the third quarter of 2021.

The lithium-ion EV battery business - which on October 1, 2021 was spun off and became a wholly-owned subsidiary, named SK On - expands quickly towards its target of over 500 GWh/annually by 2030. Let's take a look at the results.

SK Innovation Q3 2021 overall results:

  • sales: 12,300 billion KRW ($10.47 billion) up 46% year-over-year
  • operating profits: 618 billion KRW ($526 million)
  • pre-tax income: 704 billion KRW ($599 million)

Business performance - "Other"

The battery business, included in the category named "Other," remains only a small part of the entire company, but it's expanding.

  • sales: 866 billion KRW ($737 million)
  • operating profits: -126 billion KRW (-$107 million)
  • pre-tax income: -82.6 billion KRW (-$70 million)

Battery business

In Q3 2021, SK Innovation increased battery sales by about 68% year-over-year to a new all-time record and slightly narrowed the operating losses, while the operating margin noticeably improved to -12%.

The operating margin is still negative, but it's inevitable in the first years of mass expansion of the battery business. Things should look even better in 2022 when new plants will come online.

"Battery business’ sales literally shows a skyrocketing growth. Thanks to the increased rate of operation in the factories in Yancheng and Huizhou, China, which begun mass production H1 this year, the sales in Q3 2021 was KRW 816.8 billion, increased by KRW 186.6 billion compared to that in Q2 and by 68% YoY (from KRW 486 billion)."

"As mentioned earlier, the annual sales of Battery business are anticipated to go beyond KRW 3 trillion, due to several issues including instability in the supply of the automotive semiconductors. Next year, when the first plant in the U.S. and the second plan in Europe will begin mass production, the growth is expected to go up even more drastically, recording mid-6 trillion KRW."

"The sales increased along with the gross profit margin ratio, while other costs including the R&D increased, so the overall business loss in battery business decreased to KRW 98.7 billion, KRW 800 million less than Q2."

  • sales: 816.8 billion KRW ($695 million); up about 68% year-over-year
  • operating profits: -98.7 billion KRW (-$84 million)
  • operating margin: -12%

SK Innovation is investing heavily in the new battery plants - in Europe, China, and the U.S. The company intends to increase its annual battery cell output from about 40 GWh this year, 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.

As we can see on the new map, the main expansion will be in the U.S., which shows how painful the ban would've been without the settlement with LG Chem's LG Energy Solution.


Updated list of SK Innovation battery projects

South Korea

  • 4.7 GWh plant in Seosan, South Chungcheong Province, South Korea

Europe - Hungary:


  • BEST (Changzhou) : 7.5 GWh battery plant in Changzhou, China (completed in December 2019, online since Q2 2020)
  • EUE (Huizhou): battery plant in Huizhou, China (online since Q1 2021)
  • SKBJ (Yancheng): 20 GWh battery plant (plan) in Yancheng, China (online since Q1 2021)
  • SKBY (Yancheng): expected online in Q2 2024


Battery material

SK Innovation is also producing EV battery materials - lithium-ion battery separators (LiBS). It's a small but very profitable part of the business:

"Despite the production in the LiBS factory in China was stabilized, the operating profit in material business decreased to KRW 40.1 billion, down KRW 1.3 billion compared to the previous quarter, due to the diminished demands for small batteries for smartphones in the Chinese market."

  • sales: 83.4 billion KRW ($71 million)
  • operating profits: 40.1 billion KRW ($34 million)
  • operating margin: 48%
  • pre-tax income: 48.1 billion KRW ($41 million)

SK Innovation produces LiBS in South Korea, and since 2020 also in China. The biggest plant is currently under construction in Poland:

Got a tip for us? Email: