Hyundai Motor amps up use of SK Innovation EV batteries

A Kona Electric caught fire while charging on Jan. 23 in Daegu. [YONHAP]

Hyundai Motor Group is increasing its partnership with SK Innovation, selecting the battery maker as one of the key suppliers for its new range of electric vehicles (EVs).

The latest spate of fires in Hyundai Motor cars, all of which used LG Energy Solution’s lithium-ion batteries, is expected to further boost the relationship between the automaker and SK Innovation.

SK Innovation, which used to maintain a close relationship with Kia, has recently expanded its client scope to Hyundai Motor after it was selected as the sole battery supplier for the first production batch from the auto group's EV-dedicated modular platform E-GMP, which includes the recently premiered Ioniq 5.

The deal, expected to include the entire Ioniq 5 production run, is said to be worth 10 trillion won ($9 billion).

SK Innovation was also one of the suppliers selected for the E-GMP's third batch of production along with China's CATL, which will include EV models produced after 2023. The supply deal is said to be worth 9 trillion won.

The second batch of production, worth 16 trillion won, has been allocated to LG Energy Solution and CATL.

SK Innovation confirmed Tuesday that the second generation of Elec City, Hyundai Motor’s electric bus, one of which also caught fire earlier this month, will change its batteries from LG Energy Solution to SK Innovation.

The safety of LG Energy Solution’s lithium-ion batteries has been questioned after EV models using its product continued to catch on fire.

The Kona Electric is the best-known example, with 15 fires reported, 11 in Korea.

Hyundai Motor initiated a voluntary recall last October updating the model's battery management system software on all 77,000 units affected globally. At the time, Korea's Transport Ministry suspected a defect in the LG Energy Solution battery caused the fire. The company flatly denied the accusation, claiming a simulation test under the same conditions didn't result in any fires.

With the updated Kona Electric again catching fire last month, however, concerns of battery issues gained weight.

Kia's Niro EV, which shares the same platform with the Kona Electric but uses SK batteries, has not been involved in any fires.

An LG Energy Solution spokeswoman said Tuesday that its stance on the Kona Electric fires remains unchanged.

The Transport Ministry is expected to announce an official result of the investigation into Kona fires within this month. Hyundai Motor delayed submitting its second draft for a recall plan to the ministry, which was originally scheduled on Feb. 19.

Meanwhile, Hyundai Motor CEO Chang Jae-hoon on Tuesday apologized for the Kona Electric fires and said a fundamental solution will be provided soon.

“I am sorry for the inconvenience triggered by the Kona Electric fires,” Chang said during the online premiere event for the Ioniq 5.

“We have actively looked into the cause of the fires with the battery manufacturer and the Transport Ministry. With the battery manufacturer, we are going to report to the ministry and proceed with the following process.”

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]