SK On Posts KRW 80.5 Billion Q3 Operating Loss as ESS Pivot Widens

SK On, the battery unit of SK Innovation, posted a third-quarter 2026 operating loss of KRW 80.5 billion on revenue of KRW 1.53 trillion, according to SK Innovation's earnings release. The parent published the results on Oct. 29.

The result is a swing from the second quarter, when SK On booked an operating profit of KRW 821.8 billion, as reported by The Herald Business and Digital Today. SK Innovation attributes the drop to lower sales volume and a base effect from one-time gains recognized in the prior quarter. Without those one-offs, it said, underlying profitability kept improving on cost cuts and efficiency measures. The release did not put a won figure on the one-off gains.

SK On Q3 loss against last quarter and last year

Revenue fell 48.2% from the second quarter's KRW 2.95 trillion, according to The Herald Business. Against the third quarter of 2025, revenue was down 23.0% from KRW 1.98 trillion. The operating loss narrowed by KRW 44.3 billion from KRW 124.8 billion a year earlier, a 35.5% improvement, per Digital Today and Seoul Economic Daily.

SK On is a small part of a record quarter for the parent: SK Innovation reported consolidated revenue of KRW 28.77 trillion and operating profit of KRW 3.70 trillion, driven by refining and lubricants.

EV lines move to energy storage

For the battery business, the more relevant detail is where SK On is steering capacity. Kim Young-kwang, head of financial management at SK On, said on the earnings call that the company is prioritizing conversion of existing EV battery lines to energy storage system (ESS) production over building new capacity, according to The Herald Business. Lines in South Korea and parts of North America are being converted in stages, and capacity will follow confirmed orders and delivery schedules. No line count or GWh figure for the conversions was given on the call.

SK On said on Oct. 28 that it is converting 3 GWh of 7 GWh at Seosan to LFP storage lines. That earlier story also covered its UL 9540A fire-test result.

The anchor order is the roughly 9 GWh supply agreement for lithium iron phosphate (LFP) pouch cells with NeoVolta of the United States, running five years from 2027. That deal is context here rather than news: it was already public and is covered in the story linked above. SK On also holds LFP cathode supply agreements with L&F and POSCO Future M.

What the ESS pivot means for storage supply

SK On told analysts that interest in non-Chinese cells is growing among US ESS operators and system integrators that previously used Chinese cells, per NoCut News. The company estimates North American ESS demand at 80 to 100 GWh this year and expects it to more than double by 2030, according to Digital Today. Those are SK On's own estimates, not independent forecasts.

For buyers of grid and data-center storage, the practical point is a new source of US-made LFP cells in 2027 and later. Kim also said SK On is working with group affiliates on integrated energy storage systems for AI data centers, per Seoul Economic Daily.

What is not confirmed yet

The quarter shows no ESS revenue boost: the NeoVolta supply starts in 2027, and SK On has not given an ESS revenue figure. It is in talks with customers in North America and South Korea on further orders but has named no new customer, and Kim said an annual ESS order target for next year would be shared once finalized. The company expects battery sales to recover gradually in the fourth quarter, with market uncertainty persisting.