Amid the end of U.S. electric-vehicle purchase subsidies and a slowdown in demand, SK On recorded an operating loss approaching 1 trillion won last year. SK On plans to use energy storage systems (ESS) as a breakthrough.
On the 28th, SK Innovation said in its earnings announcement that last year's standalone sales for the battery business (SK On) totaled 6.9782 trillion won, with an operating loss of 931.9 billion won.
An SK On official said, "Despite increased sales volume in Europe, sales declined and the operating loss widened due to reduced sales following the end of U.S. electric-vehicle purchase subsidies."
Fourth-quarter sales came to 1.4572 trillion won, with an operating loss of 441.4 billion won. The amount of the advanced manufacturing production tax credit (AMPC) under the U.S. Inflation Reduction Act (IRA) in the fourth quarter was 101.3 billion won, down 41% from the previous quarter (173.1 billion won).
SK On carried out a portfolio overhaul to improve its financial structure. At the end of last year, it ended the BlueOval SK (BOSK) joint-venture structure it had operated with Ford. The Tennessee plant will be wholly owned and independently operated by SK On, while the Kentucky plant will be operated by Ford.
SK On recognized total asset impairments of 4.2 trillion won in the fourth quarter, of which 3.7 trillion won was related to BlueOval SK.
To respond to the slowdown in electric-vehicle demand, SK On put the ESS business at the forefront. Centered on North America this year, the company aims to secure new customers and win orders exceeding 20 GWh.
An SK On official said, "We will strengthen financial soundness and enhance operational efficiency through business portfolio readjustment," adding, "We will pioneer new application markets, including ESS, to secure profitability."