SEOUL — SK Innovation aims to increase its annual battery production capacity to 200 gigawatt-hours (GWh) in 2025, up 60 percent from its previously announced 125 GWh target.
SK, with battery production sites in the United States, Hungary, China and South Korea, currently has an annual capacity of about 40 GWh of batteries.
The South Korean company also said it is considering spinning off and listing its growing battery business, taking a page out of rival LG Chem’s playbook that is on track to list its battery unit this year.
The move, announced by SK CEO Kim Jun on Thursday, comes as demand for electric vehicles surges and automakers partner with battery makers to ensure uninterrupted supplies.
Global EV sales are set to increase by 70 percent this year, according to IHS Markit, after hitting an expected 2.5 million in 2020.
“We have not decided how to split the battery business … it takes quite a lot of resources to further grow our growing battery business, so we are considering the spinoff as one of the ways to secure resources,” Kim said, adding he will review whether to list only on Nasdaq or opt for a dual listing in the U.S. and South Korea.
Analysts said without the battery business, SK would just be left with its conventional petrochemical business, which investors do not find as attractive.
In September, LG Chem said it would separate its battery business, which supplies batteries for Tesla and General Motors, into a new company, LG Energy Solution.
LG Energy Solution last month applied for preliminary approval for an initial public offering (IPO) that publication IFR said could raise $10 billion – $12 billion.
SK’s battery business chief Jee Dong-seob said a speedy spinoff would give the company more funds to expand the business, but added it had not yet decided on details or a timeline.
SK’s battery business aims to secure more than a fifth of the global EV battery market by 2030, Jee said, adding the battery cell joint venture announced in May between the company and Ford could produce up to 180 GWh by 2030.
The South Korean battery maker also said it has more than 130 trillion won ($115 billion) worth of battery orders, which is more than 1 terawatt hours (TWh) worth of batteries, which could power about 14 million EVs.
