SK’s car battery business in limbo

2013_02_SK batterySK Innovation, formerly known as SK Energy, is facing a dilemma about whether or not to continue its ambitious car battery business now that the market for electric vehicles is in the doldrums.

It’s highly uncertain whether the SK Group affiliate will completely abandon its car battery business as the group still believes the business will generate more profit once demand picks up.

Currently, its major clients are struggling to commercialize electric vehicles, and governments in Europe are passive in their funding for electric vehicles amid economic uncertainties, obviously hitting battery suppliers.

“Survival is the key for SK Innovation. Unlike LG Chem, which realizes economies of a scale in its car battery business, SK is a second-tier manufacturer, meaning chances are very low that SK will win more lucrative deals in car batteries than its rivals,” said a senior fund manager from a U.S.-based investment bank in Seoul, which recently cut its position on SK Innovation, Tuesday.

For full article see Korea Times.

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