The South Korean EV battery maker SK On is facing challenges amidst a slowdown in global electric vehicle (EV) demand. In response to this, the company is expanding its product portfolio by venturing into prismatic batteries, in addition to its existing pouch-type batteries. This strategic move comes as SK On aims to adapt to the changing market dynamics and secure deals with multiple automakers.
SK On, a unit of energy group SK Innovation, is currently in talks with automakers to supply prismatic batteries. These prismatic batteries offer a new avenue for the company to diversify its product offerings and cater to the evolving needs of the market. By leveraging its existing technology and expertise, SK On is poised to enter the prismatic battery segment and strengthen its position in the EV battery market.
In the EV industry, there are three main types of lithium-ion batteries – prismatic, cylindrical, and pouch-type. Each type has its own set of advantages and disadvantages, with prismatic and cylindrical batteries being encased in hard materials, while pouch-type batteries use sealed flexible foils. SK On currently specializes in pouch-type batteries but is now gearing up to introduce prismatic batteries, expanding its range of offerings to potential customers.
Despite facing financial challenges and a history of losses, SK On is committed to maintaining its research and development efforts. The company’s chief spokesperson emphasized that SK On will not cut its capital expenditure or research and development spending, as it aims to stay competitive and innovative in the rapidly evolving EV battery market. This strategic focus on technology development will enable SK On to enhance its product capabilities and meet the demands of automakers.
In light of slowing EV demand, SK On’s rival LG Energy Solution (LGES) has announced plans to minimize capital expenditure. However, SK On remains optimistic about its growth prospects and targets breaking even in the second half of the year. The company recently implemented cost-cutting measures, including freezing executive salaries, to improve its financial performance. Furthermore, there are speculations about a potential merger between SK Innovation and SK E&S to support SK On’s operations and enhance its competitiveness in the market.
As SK On navigates through a challenging market environment, the company is focused on expanding its product portfolio, investing in research and development, and implementing cost-saving initiatives. The upcoming board meeting of SK Innovation highlights the company’s commitment to exploring strategic measures, including potential mergers, to strengthen its position in the market. By adapting to market trends, innovating its product offerings, and fostering strategic partnerships, SK On aims to overcome the current challenges and emerge as a key player in the evolving EV battery industry.
SK On’s decision to expand into prismatic batteries reflects its proactive approach to adapt to changing market conditions and position itself for future growth. By leveraging its technological capabilities, maintaining a focus on research and development, and exploring strategic partnerships, SK On is well-positioned to navigate challenges in the EV battery market and drive its business forward.