Operating loss at SK Innovation’s battery subsidiary SK On expanded in the fourth quarter of 2025, driven by weakening demand and reduced tax incentives in the North American EV market.
According to SK Innovation’s earnings call on Wednesday, SK On recorded 1.46 trillion won ($1 billion) in revenue and an operating loss of 441.4 billion won from October to December 2025. Revenue declined 8.85 percent year on year, while the operating loss widened by 18.58 percent.
The quarterly operating loss was the largest recorded since the second quarter of 2024, when it reached 460.1 billion won. While the company had reduced the loss to about 124.8 billion won in the previous quarter, results were weighed down by the removal of EV consumer subsidies in the US — one of its largest battery markets — in September last year.
Kim Young-gwang, head of finance at SK On, said, “The company is accelerating portfolio rebalancing to improve the financial stability and investment efficiency of its battery business, while strengthening cost competitiveness through rigorous cost structure reviews, operational efficiency improvements, and AI- and digital-driven transformation of supply chain and manufacturing operations.”
SK On said one of its key measures to restore financial stability is completing the separation of the BlueOval SK joint venture with Ford Motor Company.
Since December last year, SK On has been executing an asset reallocation with Ford. The US automaker will take over the Kentucky plant, while SK On will acquire the Tennessee facility. The transaction is expected to be completed in the first quarter. Once finalized, is projected to reduce borrowings by about 5.4 trillion won, strengthening the company’s financial structure.
Ahn Geon, head of SK On’s planning and coordination office, said the Tennessee plant will supply batteries for Ford’s upcoming extended-range electric vehicle models, with commercial production slated for 2028. The facility will also seek to supply other carmakers and meet growing North American demand for energy storage systems to maximize its utilization rate.
SK On highlighted its North American ESS business, targeting more than 20 gigawatt-hours of global orders this year after securing a 1 gigawatt-hour contract from Flatiron Energy Development last year. The company said it will leverage its US production bases, including the Tennessee plant and a facility in Georgia.
Battery-related capital expenditure for this year is projected at 1.3 trillion won. SK On also signaled plans to expand into emerging battery applications, including robotics, space-related industries, autonomous vehicles, marine ESS, electric buses and urban air mobility, and said it is in talks with multiple partners on supply deals.
By Byun Hye-jin (hyejin2@heraldcorp.com)
