South Korean battery maker SK On is in negotiations with automakers to supply prismatic batteries, expanding from its current pouch-type batteries, as it seeks to improve its position amid slowing global EV demand. SK On, a unit of SK Innovation, already supplies EV batteries to companies like Ford, Hyundai, and Volkswagen, according to chief spokesperson Ko Chang-Kook.
Ko stated that SK On has completed prismatic battery technology and is ready to start production once agreements are finalized, though he did not name specific automakers. Currently, SK On produces only pouch-type batteries but aims to diversify its portfolio with prismatic and potentially cylindrical batteries, the latter commonly used by Tesla.
Despite never having made a profit since its 2021 split from SK Innovation, SK On does not plan to cut capital expenditure or research and development spending this year. SK Innovation allocated over 80% of its 9 trillion won ($6.55 billion) budget to SK On for 2023.
While competitor LG Energy Solution has minimized capital expenditure and paused some U.S. factory construction due to reduced EV demand, SK On targets a break-even in the second half of this year. To achieve this, it has implemented expense cuts and frozen executive salaries.
Reports suggest SK Innovation may merge with its gas affiliate SK E&S to support SK On. A board meeting next Wednesday will discuss strategic measures, including potential mergers, but no decisions have been made yet.
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