SK Innovation has decided to join hands with BAIC Group and enter electric vehicle (EV) battery swap business in China.
The company announced on Thursday that it has acquired a minority stake of 13.3% in “BPSE (Blue Park Smart Energy Technology)”, which is a subsidiary of BAIC Group specializing in battery swap service, and secured a position as a major strategic investor of BPSE. The exact amount of its investment in BPSE will not be made public based on an agreement between SK Innovation and BPSE.
Establishing a joint battery manufacturing company with BAIC Group back in 2013 and investing in BPSE have enabled SK Innovation to prepare a footholdfor pursuing battery service business in China that is the world’s biggest EV market. SK Innovation and BAIC Group have decided to work together in the BaaS (Battery as a Service) field and they expect to create synergy with the existing battery business in China. BaaS indicates a service industry that is based on EV battery rental, charging, reuse, and recycling.
SK Innovation plans to find different business models and expand its business towards service areas that cover the entire battery life cycle.
SK Innovation and BAIC Group plans to focus mainly on battery swap stations. A battery swap station is based on an offline store just like gas stations and replaces discharged battery packs with charged battery packs entirely. Demands for such stations are growing mainly through taxis and car sharing services that require relatively long mileages. Also, because battery swap service can separate ownership of EVs and batteries, it is easy to expand business towards other service areas such as rental and reuse. Battery swap stations can also be helpful in constructing power distribution infrastructures in downtowns as their batteries can be utilized as energy storage systems. Because SK Innovation operates the most gas stations in South Korea, it can also expand battery swap business in South Korea as well.
“We plan to change the paradigm of future EV markets through a BaaS business model that combines SK Innovation’s battery technology and BPSE’s exchangeable battery operation technology.” said President Ji Dong-seop of SK Innovation’s Battery Business. “For the ESG (environment, society, governance) management in the future, we plan to actively utilize BaaS business in the field of battery reuse and recycling.”
Meanwhile, BPSE is a company that receive an authorization from the Ministry of Industry and Information Technology of China for its battery reuse business. It is a leader in the battery reuse industry that operates battery swap stations for taxis and shared service operators (mobility as a service) in Beijing. It also has huge influence on related industrial policies by leading the establishment of Chinese national standards on exchangeable batteries.
Staff Reporter Kim, Jiwoong | jw0316@etnews.com