SK innovation enters battery swap business in China

SK Innovation recently participated as a strategic investor in Blue Park Smart Energy (BPSE), a subsidiary of BAIC in China.

  • BPSE: a battery swap type EVs supplier and battery swap station operator

? SK Innovation has secured a foothold to promote the BaaS (Battery as a Service) business in China, the world’s largest EV market.

? President of SK Innovation’s Battery Business Jee Dong-seob: “We will change the paradigm of the future EV market through the BaaS business model that combines SK Innovation’s high-quality, long-life battery technology and BPSE’s battery swap operation technology.”

SK Innovation announced that through its Chinese subsidiary, SKFS (SK Future Energy Shanghai), it has acquired a 13.3% stake in Blue Park Smart Energy (BPSE), which belongs to BAIC. Through this investment, SK Innovation has secured the position of being a major strategic investor of BPSE. Other financial details of the investment are disclosed.

SK Innovation established a battery manufacturing joint venture with BAIC in 2013. This investment laid a bridgehead to promote the company’s battery service business in China, which accounts for nearly half of the global EV market. The two companies  decided to promote cooperation in the BaaS business field through a business agreement and are expected to create synergy with China’s existing battery business.

*BaaS: Battery as a Service, a service industry based on EV batteries such as battery rental, charging, reuse, and recycling

As a result, SK Innovation can harvest from promoting business model innovation beyond the battery manufacturing industry to the service industry based on its business competitiveness based on long lifespan and high-quality battery-related technology. In the future, it plans to continue to discover business models and expand the business into service areas throughout the entire battery life cycle, such as battery rental, charge, reuse, and recycling.

BPSE is a battery reuse company authorized by the Chinese Ministry of Industry and Information Technology and specialized in whole life cycle value of battery. The main business is the R&D and operation of battery swap stations, and the use of power storage batteries step by step. It is an important participant oin the standardization of China’s battery swap technology. BPSE is a top-class service-sharing company in the industry, mainly providing battery swap service for taxi and shared cars (MaaS: Mobility as a Service) and operating battery swap stations in Beijing. 

The first BaaS business that both companies are paying attention to is the battery swap station. The battery swap station is a service that swaps a discharged battery pack into a charged battery pack entirely based on an offline store like a gas station. The battery can be swapped in a short time, overcoming the limitations of existing rechargeable batteries that take a lot of time to charge.

With such strong points, this is an area that is expected to grow in the future, with increasing demand especially for mobility vehicles with relatively long mileage such as taxis and vehicle sharing services. Besides, since the battery swap service can separate ownership of EVs and batteries, it is easy to expand to various service fields such as battery rental and reuse.

The battery installed in the battery swap station can be used as an energy storage system (ESS), so it is expected to help build a power distribution infrastructure in downtown in the future. Since SK Innovation has the largest number of gas stations in Korea, it is possible to expand into battery swap stations and energy storage systems in Korea in the future.

SK Innovation will change the paradigm of the future EV market through the BaaS business model that combines SK Innovation’s high-quality, long-life battery technology and BPSE’s exchangeable battery operation technology,” said President of SK Innovation’s Battery Business Jee Dong-seob. “We will actively utilize the BaaS business in the field of battery reuse and recycling for ESG (environment, society, governance) management in the future”, he added.