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EV batteries

SK Innovation to split battery unit, eyes Nasdaq debut as it goes greener

The company plans to invest $26.5 billion until 2025 to shed its image as a major carbon emitter

By Jul 01, 2021 (Gmt+09:00)

Kim Jong-hoon, chairman of SK Innovation's board of directors, speaks at the company's Story Day
Kim Jong-hoon, chairman of SK Innovation's board of directors, speaks at the company's Story Day

South Korea’s SK Innovation Co. said on Thursday it is considering a spin-off of its battery business and listing the separated entity on the Nasdaq, while unveiling a long-term goal to turn into an eco-friendly company by investing 30 trillion won ($26.5 billion) into green projects by 2025.

The energy and chemical subsidiary of the country’s third-largest conglomerate, SK Group, said its green projects will account for 70% of its entire business portfolio by 2025 from the current 30% to reduce its carbon footprint and create new sustainable business opportunities.

SK Innovation, which owns Korea’s largest refiner SK Energy, currently generates most of its revenue and profit from its exploration and petroleum (E&P) business.

“With the 30 trillion won investment, we’re transforming into a green company from a carbon-emitting entity. And the expansion of our battery business is at the center of the transition,” said SK Innovation Chief Executive Kim Jun during an investor relations session dubbed Story Day.

As part of its efforts to go greener, the CEO said the company may spin off its battery business and seek an initial public offering to raise money for battery capacity expansion and other eco-friendly projects.

“If we decide to do so, we may list the separate company on the Nasdaq. A dual listing on both the Korean and US markets is also an option,” he said.

SK Innovation CEO Kim Jun
SK Innovation CEO Kim Jun


Shares of SK Innovation fell as much as 9.3% on the day as investors dumped the stock in the belief that a spin-off of the battery business would significantly hurt the oil refiner’s corporate value.

The stock finished 8.8% lower – the biggest percentage fall in over 15 months – at 269,500 won on Thursday.

CEO Kim said the company hasn’t finalized the method and timing of a battery spin-off and the plan requires approval from its board and shareholders.

He added that SK Innovation will actively pursue new business opportunities such as the recycling of used batteries and seek M&As to grow the company.


The company said it currently has a battery order backlog of 1,000 gigawatt-hours (GWh) worth 130 trillion won.

Only the world’s two largest battery makers, China’s CATL and Korea’s LG Energy Solution Ltd., have an order backlog of more than 1,000 GWh, respectively.

To meet growing demand, SK Innovation said it aims to increase its annual battery production capacity to 200 GWh by 2025, up sharply from a previously announced goal of 125 GWh.

With production sites in the US, Hungary, China and South Korea, SK now has an annual battery capacity of about 40 GWh. By 2030, it aims to ramp up its yearly battery capacity to 500 GWh.

SK Innovation, which supplies batteries to carmakers such as Hyundai Motor Co., Volkswagen and Ford, has been aggressively expanding facilities worldwide, with an aim to emerge as one of the top three players.

CEO Kim said he expects the company’s battery business to swing to a profit this year in terms of earnings before interest, taxes, depreciation and amortization (EBITDA), and for the profit to increase to 1 trillion won by 2023.

SK Innovation's EV battery plant under construction in Georgia
SK Innovation's EV battery plant under construction in Georgia

On Thursday, SK Innovation also unveiled a plan to expand its lithium-ion battery separator business to nearly triple production capacity by 2025 with over 1.4 trillion won in profit from the business by then.

Other areas of business focus include plastic recycling, it said.

The company plans to recycle more than 2.5 million tons of waste plastics a year by 2027 for use as a raw material for its petrochemical products. By 2025, it expects a profit of 600 billion won a year from plastic recycling.


Since SK Group entered the oil refinery business in 1980, SK Innovation has been a major cash cow of the group, generating decent cash flows for other affiliates such as SK Telecom Co. and SK Hynix Inc.

Industry watchers say Thursday’s announcement is in line with a worldwide corporate move to slash carbon emissions and embrace the global paradigm shift toward eco-friendly business practices.

SK Innovation unveils its long-term goal to turn into an eco-friendly company.
SK Innovation unveils its long-term goal to turn into an eco-friendly company.

SK Innovation said it will gradually reduce investment in its refinery business and make fewer petrochemical products.

“Eventually, we may not make oil products for land transportation such as gasoline and diesel,” said SK Energy CEO Cho Kyong-mok. “We’re also considering switching such facilities to make naphtha instead.”

Write to Jae-Kwang Ahn at

In-Soo Nam edited this article.
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