SK Innovation, Korea’s largest oil refiner, said Thursday that its earnings sank 21 percent last year on lower oil prices and less demand for petrochemical goods. Net profit reached 1.69 trillion won last year, compared with a profit of 2.15 trillion won a year earlier, the company said in a regulatory filing.
Operating income dropped 34.2 percent year-on-year to reach 2.12 trillion won, while sales spiked 18.1 percent to 54.5 trillion won over the cited period.
SK Innovation is supplying electric car batteries to Volkswagen Group along with existing suppliers LG Chem and Samsung SDI, the Korean battery maker said Wednesday. The Volkswagen Group brands plan to launch 50 new fully electric models by 2025, and the group said it needs more battery supplies in a statement Tuesday. SK Innovation was the last of the four battery suppliers selected by the carmaker.
SK Innovation will start supplying batteries to Volkswagen cars in Europe from 2019. LG Chem and Samsung SDI are also strategic partners in the auto company’s European operations.
From 2022, SK Innovation will also supply batteries for the North American market.
The group’s electric car production in China will source batteries from Chinese partner Contemporary Amperex Technology (CATL) from 2019.
SK Group’s battery arm is planning on covering Volkswagen orders by setting up new facilities in Europe and the United States. Currently, the company is mulling three locations in the United States, it said, without giving details about the production capacity or the amount of investment. As for its newly-planned European plant, the company said it is considering multiple locations including Hungary, where it is already building a plant.
When all planned factories are in place, SK Innovation’s battery production capacity will increase to 20 gigawatt-hours per year by 2022, the company said. Despite being a latecomer to the market, SK Innovation has been rapidly expanding its battery business. Daimler and Kia Motors are also using SK batteries.
Its share of this year’s global battery market, excluding China, was 2.2 percent based on accumulated battery sales through the end of September, according to data from market tracker SNE Research, growing from 1.4 percent the same period last year.
LG Chem is still the largest local player, with a 17.5 percent market share, followed by Samsung SDI, with an 8.2 percent market share.
“With SK Innovation, LG Chem, Samsung and CATL, we have found strong partners for the long-term supply of cells for our electric vehicles,” said Stefan Sommer, a Volkswagen board member responsible for components and procurement.