SK Inno Enters Chinese Battery Replacement and Recycling Service Business

Acquisition of 13.3% Stake in BPSE under Beijing Automotive Group

Battery replacement station operated by Blue Park Smart Energy in Hangzhou

[Asia Economy Choi Dae-yeol] SK Innovation has decided to operate a service business in China that charges, replaces, and recycles electric vehicle batteries. China, as the world's largest electric vehicle market, has established a local battery production base and is now expanding the service sector based on this foundation.

On the 21st, SK Innovation announced that it acquired a 13.3% stake in BluePark Smart Energy (BPSE), a battery reuse company under Beijing Automotive Group. Among external strategic investors, it holds the largest share, but the investment amount was not disclosed according to mutual agreement between the two companies. Previously, in 2013, SK Innovation established a battery manufacturing joint venture with Beijing Automotive Group, and by joining as a major shareholder this time, the company expects to actively promote the battery service business in China.

BPSE operates battery replacement stations targeting taxi and ride-sharing service operators in Beijing. It is known as an industry leader and has been authorized by Chinese authorities to conduct battery reuse business. BPSE has also led the establishment of national standards for swappable batteries in China. SK Innovation has been pushing to expand beyond battery manufacturing into BaaS (Battery as a Service) businesses based on electric vehicle batteries, including charging, rental, reuse, and recycling.

The two companies have agreed to first expand battery replacement stations. This service is based on offline stores similar to gas stations, where depleted battery packs are swapped entirely for charged packs. While fast charging takes tens of minutes, replacement takes about five minutes. Demand is increasing mainly among taxis and shared vehicles, which have relatively long driving distances.

SK Innovation expects that batteries gathered at the stations can be used as energy storage systems (ESS), which will also help build distributed power infrastructure within urban areas in the future. A similar method can be applied to gas stations in Korea. Ji Dong-seop, head of SK Innovation's battery business, said, "Through the battery service business model, we will change the paradigm of the future electric vehicle market."

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