Chairman Chey Tae-won of SK Group.(Photo: SK Group)

SK Group, the third largest conglomerate in Korea, has decided to make businesses related to environmentally-friendly electric cars, such as batteries and car rentals, its next-generation growth engines.

The group will make the electric car a hot competitive sector in the country with the four largest conglomerates teaming up to participate in the business area with Hyundai Motor Group producing the electric cars and Samsung Group (Samsung SDI) and LG Group (LG Chem) producing batteries for electric cars.

Car manufacturing and business sources said recently that SK Innovation, SK Chemical, SK Networks, and SK Planet have all expressed their intention to engage in the manufacturing of electric cars, with SK Innovation taking the lead by setting up a joint-venture company with Beijing Motor in April 2013 called Beijing Best-Technology with plans to build a manufacturing line to turn out 10,000 battery packs annually in the second half of this year.

SK Innovation plans to sign a supply contract with Kia Motors and supply batteries for its Soul electric cars and also expand a battery manufacturing line enough to turn out batteries for 20,000 electric vehicles annually in Sosan, South Chungcheong Province, diversifying its production and marketing strategies to expand its electric battery business.

SK Chemical, in the meantime, began producing polyphenylene sulfide, a super engineering plastic, to replace the metal needed in the production of automobiles. Demand for the plastic material is projected to grow as the production of electric vehicles expands in the near future. The company also plans to sign a joint-venture contract with Teijin of Japan to set up a company called “Initz.”

SK Networks, which has been operating a car rental business with 22 electric vehicles, will soon buy 24 electric Souls from Kia Motors to expand its rental business around the country including Jeju Island. SK Planet has also decided to make the Telematrix, connecting smartphones and electric vehicles, its main growth engine.

SK Group has decided to take on the electric vehicle industry as its key future growth engine as it can take full advantage of its businesses such as ICT and chemicals.

Chairman Chey Tae-won has also been taking great interest in the matter. When Thai Prime Minister Yingluck Shinawatra visited Korea in 2012, the chairman told the Thai leader that the group can supply electric batteries to electric vehicles that a Thai EV maker produces, which sparked great interest from the Thai official. But nothing has come of the incident since the chairman has been incarcerated. But the situation has been such that it cannot be ruled out completely as Chairman Chey and the Thai government are still interested and might take on the matter as soon as they are ready to tackle things again.

SK Innovation has integrated its battery and NBD in charge of information electronic material in a bid to strengthen its businesses related to electric vehicles.

The Soul electric vehicles powered by SK Innovation’s batteries have secured the top spots in biddings held for electric vehicles to be used for car rental businesses in five metropolitan cities including Busan and Jeju City. SK Innovation has been engaged in the development of lithium batteries since 2005 and the company has been named to supply its electric batteries for the Mercedes Benz SLS AMG electric car model.

SK Networks, with the largest annual sales among the integrated trading companies, plans to focus on electric car rentals and electric battery recharging stations around the country as part of its future growth engines.