Choi Jaewon 'Battery Chief' Comeback (Comprehensive)

Appointment of SK On CEO at Board Meeting
Jidongseop as Co-CEO
Board Chair is Vice Chairman Kim Jun

Choi Jae-won, Senior Vice Chairman of SK Group. In the personnel reshuffle on the 17th, he was appointed CEO of the battery affiliate SK On.

[Asia Economy Reporters Choi Dae-yeol and Hwang Yoon-joo] Choi Jae-won, Senior Vice Chairman of SK Group (pictured), has officially returned to management as CEO of SK On, the battery business affiliate. He is the younger brother of SK Group Chairman Choi Tae-won and returned after more than eight years since stepping down from the front lines of management due to allegations including embezzlement. Since his release on parole in July 2016, five years have passed and his employment restrictions have been lifted, so there have been steady expectations inside and outside the company that he would take on an official title and lead the business. It is notable that he chose the battery sector, where domestic and international competition has recently intensified, as his comeback stage while gaining influence within SK Group.

On the 17th, SK On held a board meeting and appointed Senior Vice Chairman Choi as CEO. He will serve as co-CEO alongside President Ji Dong-seop, who was the existing CEO. Choi will be responsible for growth strategy and internal and external cooperation, while Ji will oversee overall management. SK On is a subsidiary of SK Innovation, launched last October, producing batteries used in electric vehicles and energy storage systems (ESS).

There had been speculation that he might chair the company's board, but this appointment is interpreted as reflecting his intention to work directly on the front lines as a ‘player’ rather than a ‘supervisor.’ SK officially designates the board of directors as the highest decision-making body for each affiliate. The chairman of SK On’s board is Kim Joon, Executive Vice President of SK Innovation. SK Innovation’s board appointed Senior Vice Chairman Choi as an inside director, highly valuing his early recognition of the battery business’s growth potential, his leadership in planning and increasing investments, and his global business acumen and network.

Exterior view of the electric vehicle battery factory built by SK On in Georgia, USA [Image source=Yonhap News]

SK’s Key Role in Battery Growth
"Expanding and Contributing to the Global Electric Vehicle Battery Service Market"

Senior Vice Chairman Choi played a major role in growing SK’s battery business. Even before returning to management, he was directly involved in establishing global production bases and negotiating with original equipment manufacturers (OEMs). Unlike LG Energy Solution and Samsung SDI, SK does not have affiliates with large internal battery demand, and since accumulated know-how in research and development (R&D) and production is crucial in this field, there were initial concerns about whether SK could be competitive as a latecomer.

Choi, who has long been interested in the mobility business, anticipated the increasing importance of batteries in the future automotive market and encouraged active investment. Although there were concerns about cannibalization with the existing petroleum business, he viewed it as an unavoidable path considering the trends in the automotive market. As electric vehicle adoption increased and battery demand surged, this prediction proved accurate. According to the company, SK’s battery order backlog stands at 1,700 GWh, enough for 20 million mid-sized electric vehicles. Based on electric vehicle installation volume, SK has risen to rank among the world’s top five.

Choi Jae-won, Senior Vice Chairman of SK Group, is seen riding the hybrid 4-wheel bicycle 'SEED Car' at the Kia Motors exhibition hall during CES 2019, examining the product. / Las Vegas, USA - Photo by Kim Hye-won, Asia Economy

With global competition in the battery market intensifying, Senior Vice Chairman Choi’s responsibilities are inevitably heavy. SK On is building or planning factories directly in the three major global automobile markets: the United States, Europe, and China. As factory scales grow, trillion-won level investments have become frequent, making coordination with automakers that use the batteries a key issue. Alongside expansion, competition in next-generation technologies such as solid-state batteries is fierce. The company must also develop upstream and downstream battery businesses that will grow as the market expands.

Senior Vice Chairman Choi Jae-won said, "We will rapidly grow SK On to accelerate SK Group’s decarbonization strategy and contribute to the expansion of the global electric vehicle and battery service market, thereby providing new value to consumers."

Meanwhile, SK On appointed six new executives and recruited nine executives from affiliates on the same day. To establish a global mass production system, the company strengthened manufacturing-related organizations and newly created or reinforced regional dedicated teams, quality control departments, and advanced research divisions.