Battery Maker SK On Declares 'Emergency' As EV Sales Disappoint

'A leading South Korean producer of electric vehicle batteries has declared itself in crisis,' reports the Financial Times, 'as its customers struggle with disappointing EV sales in Europe and the US.'

SK On, the world's fourth-largest EV battery maker behind Chinese giants CATL and BYD and South Korean rival LG Energy Solution, has recorded losses for 10 consecutive quarters since being spun off by its parent company in 2021. Its net debt has increased more than fivefold, from Won2.9tn ($2.1bn) to Won15.6tn over the same period, as western EV sales have fallen far short of its expectations. With losses snowballing, chief executive Lee Seok-hee announced a series of cost-cutting and working practice measures last Monday, describing them as a state of 'emergency management'.

'We have our back against the wall,' Lee wrote in a letter to employees. 'We should all pull together.'

Tim Bush, a Seoul-based battery analyst at UBS, said the South Korean battery makers had been 'badly let down' by US car manufacturers, which he said had failed to produce EVs sufficiently attractive to mass market consumers to meet their own bullish sales projections. He noted that until as recently as last year, General Motors was forecasting it would sell 1 million EVs in 2025. It sold just 21,930 in the second quarter of this year.

Bush tells the Financial Times that 'the automakers didn't invest enough in producing high-quality affordable EVs.' But he also tells the newspaper that a transition to EVs is still 'inevitable'.

'As long as the wider SK Group continues to see SK On as a trophy asset and gives it the support it needs to weather the present storm, then its long-term future is likely to be assured.'

Thanks to long-time Slashdot reader schwit1 for sharing the article.

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