Despite a global slowdown in terms of demand for all-electric vehicles over the past few months, Ford EV partner SK On continues to move forward with its expansion plans – much of which involve securing the raw materials it needs to build EV batteries for years to come. In fact, SK sees this slowdown as merely temporary, and believes that the longer term outlook for the EV market is far rosier, which is also why it continues to sign deals with all sorts of materials suppliers. Now, the Ford EV partner is consolidating its operations in the latest of several moves the company has made as of late.
According to Reuters, SK Innovation – the parent company of SK On, its EV battery division – plans to merge with the energy affiliate SK E&S, which aims to help make up for losses in the battery unit. The new entity will sport combined assets of 100 trillion won ($72.57 billion USD), buoyed by SK E&S’ 2023 operation profit of 1.3 trillion won ($939.37 million USD). As for SK On, it has yet to turn a profit since being spun off as its own separate entity back in 2021.
“The merger is expected to positively impact the company’s profit and financial structures by enhancing competitiveness of its mid- to long-term energy business,” SK Innovation said in a regulatory filing. SK On posted cumulative operating losses of 2.3 trillion won ($1.7 billion USD) as of the end of March.
Regardless of this move, SK On still expects to break even by 2025, with a rosier long-term outlook. As such, the battery unit has reached a number of agreements with raw materials providers and other companies over the past several months, with the latest being with ExxonMobil. That non-binding memorandum of understanding (MOU) will grant SK a potential lithium offtake agreement in the U.S., and up to 100,000 metric tons of lithium mined in the U.S.
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