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SK Innovation to end Li-ion JV with Continental due to slow demand growth for EVs

Yonhap News reported that SK Innovation Company will end the battery-pack joint venture with German partner Continental AG (earlier post) due to slow growth in demand for electric cars.

The two companies launched the JV, SK Continental E-motion, in January 2013, with the mission of developing, producing and distributing lithium-ion based battery systems for cars and light commercial vehicles. (Earlier post.)

SK Innovation had a 51% stake while Continental owned 49%. Both planned to invest about €270 million (at the time, around US$359 million) in the JV over five years. Yonhap said that the companies are the partnership early due to weak market demand for battery-powered vehicles amid limited infrastructure and falling oil prices.

According to Yonhap, SK Innovation said in a regulatory filing that it will buy a full stake in the Korean branch of the joint venture at 14.48 billion won (US$13.87 million) via off-board transactions within this year to dissolve it.

Yonhap quoted an SK Innovation official as saying:

We decided to withdraw from the battery venture with Continental due to the lower-than-expected synergy because clean diesel vehicles were selling more than electric vehicles in the European market. We will continue to research and develop batteries for electric vehicles in the future.

Comments

Brotherkenny4

Actually, EV and PHEV demand is increasing. Just once I'd like one of these failed companies to come out and say that they just can't compete in the market. They were likely unable to beat the cost and quality that others are able to achieve.

electric-car-insider.com

SK's main line of business is oil. I guess they didn't get the memo that France is banning diesel passenger vehicles. UK, following London, may not be far behind.

Good thing VW will soon be producing cars they can sell in Europe in 2020.

Whether you're concerned about particulates or CO2, diesels stink.

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