The global electric vehicle market has begun to show signs of saturation, affecting the battery supply chain. According to a report from Korean media Maeil Business, in response to the downturn in battery demand, South Korea’s SK Group holding company, SK Innovation, intends to sell its subsidiary SK IE Technology (SKIET) to raise funds and strengthen its financial position.

The report cited sources, indicating that SK Innovation is actively seeking investors for capital injection and has begun negotiations. Additionally, the possibility of selling its battery material subsidiary, SKIET, may not be ruled out as a consideration to obtain cash for flexible use, in response to the shrinking appetite in the battery market.

As per a report from MoneyDJ, SK Innovation holds a 61.2% stake in SKIET, valued at KRW 2.5 trillion (approximately USD 1.8 billion).

Industry sources further pointed out that SK Innovation’s decision to sell SKIET is primarily driven by the need for additional funds to expand its electric vehicle battery business under SK On, including the expansion of its battery factories in the United States, according to the aforementioned reports.

Reportedly, SK On anticipates capital expenditures of KRW 7.5 trillion this year. However, the sources believe that whether SK Innovation can find a buyer for SKIET remains to be seen, given SKIET’s poor performance.

SK On’s clients include well-known automakers such as Ford, Volkswagen, and Hyundai. However, in a high-interest-rate environment, global electric vehicle sales have stalled, leading SK On to incur a significant operating loss of KRW 332 billion in the first quarter, far exceeding the KRW 18.6 billion loss in the previous quarter.

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(Photo credit: SK Innovation)