Chairman of SK Innovation’s Board of Directors Jong-hoon Kim Na

SK Innovation Co., South Korea's refinery-to-battery company, said Thursday it will invest 30 trillion won ($26.5 billion) over the next five years to transition from a carbon-intensive model to green business centered on electric vehicle batteries and renewable energy.

The energy and chemical subsidiary of the nation's No. 3 conglomerate, SK Group, said it aims to increase the ratio of eco-friendly business from the current 30% to 70% by 2025 to reduce its carbon footprint and create new business opportunities, CEO Kim Jun said in a press conference.

SK Innovation, the world's No. 6 battery maker, said it has bagged over 1 terawatt-hours worth of EV battery orders estimated around 130 trillion won and expects additional deals from global automakers.

Its clients include Volkswagen and Ford in the United States, Daimler in Europe, and Hyundai Motor and Kia in Asia, and rolls out batteries in factories in South Korea, China, the U.S. and Hungary.

Last month, SK Innovation and American automaker Ford Motor said they will establish a 6 trillion-won joint venture to build a battery factory with 60 gigawatt hours of production in the U.S. by the mid-2020s.

"We will become the world's third-largest battery maker in terms of the monthly sales in late 2022," Ji Dong-seop, the chief of SK Innovation's battery business, said during the conference.

Currently, China's CATL and Korean manufacturer LG Energy Solution Ltd., which supply batteries to leading EV maker Tesla., are the world's top two battery makers.

The company said it will ramp up the battery production capacity from the current 40 GWh to 200 GWh in 2025 to meet growing demand, raising prospects of generating 2.5 trillion won of earnings 2025.

To shift away from its carbon-intensive model, SK Innovation said it is considering splitting its battery business and petrochemical business, without elaborating on details.

After establishing the new corporate structure, SK Innovation will serve as a holding firm in charge of developing its eco-friendly business portfolio and push for a merger and acquisition in the green business, the firm said.

Shares of SK Innovation dipped 6.09% on the Seoul bourse in the morning trade, following its announcement that it will split its battery business.

Source: https://en.yna.co.kr/view/AEN20210701003700320