Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Conglomerates struggle with EV charging profits amid sluggish demand
Seen above is ultra-fast electric vehicle chargers set up at a highway in Korea in this undated photo. Courtesy of SK Signet
By Lee Min-hyung
Major conglomerates face widening earnings falls in their electric vehicle (EV) charging businesses, as tepid sales growth for all-electric cars makes it harder for them to generate any immediate returns from the once-promising industry, according to data and industry officials, Tuesday.
LG Electronics became the first to have decided to exit the business. The company tapped into the industry by acquiring HiEV Charger, formerly AppleMango, in 2022. It invested 41 billion won ($28.5 million) over the past three years but opted to drop the business amid its sequential losses of billions of won in the past two years.
Other large firms, such as SK, Hyundai Motor, Shinsegae and Lotte, have also endured losses with their EV charging station businesses.
SK Signet, which operates a global business specializing in ultra-fast EV charging, has suffered growing operating losses in recent years. The company reported an operating loss of 245.2 billion won last year, a 41 percent increase from the previous year. The 2024 loss is nearly three times as high as its sales during the same period.
The earnings decline pushed the company to start a voluntary retirement program about two weeks ago. At that time, it explained the decision came as part of its typical personnel relocation but reflecting on the rapidly growing loss, the firm’s latest move raised concerns that SK may end up selling the business.
The EV infrastructure business faces headwinds largely due to the ongoing chasm of EVs before their mass adoption. However, the long-term outlook for EV infrastructure projects remains promising, as global carmakers are planning to phase out sales of internal combustion engine vehicles in favor of a full transition to EVs over the medium to long term.
“Each conglomerate has a different perspective on the business, as some of them still consider it lucrative once they overcome the ongoing EV growth slowdown,” an official from a carmaker said. "However, this may not be the case for other firms, such as LG Electronics."
EV charging is also considered one of the next major cash cows for retail giants here.
All-electric cars are parked at a charging station outside the KINTEX convention hall in Goyang, Gyeonggi Province, April 22. Yonhap
Lotte Group has identified mobility as one of its four next growth engines. Lotte Innovate, an IT service affiliate of the group, operates an EV charging station arm, EVSIS. The company established a smart factory last year in Cheongju, North Chungcheong Province, enabling it to produce some 20,000 EV chargers annually.
However, EVSIS’ earnings are also deteriorating due to the overall EV market slowdown. The company reported an operating loss of 13.3 billion won last year. This is five times higher than that from the previous year.
Shinsegae I&C also runs an EV charging business with its Spharos EV brand but is not generating any meaningful earnings for a similar reason.
Hyundai Motor Group acquired the management rights of Korea Electric Vehicle Charging Service (KEVCS) in 2021. The carmaker is going all-out to drive the popularization of EVs here and abroad and has achieved noteworthy earnings growth for EV sales, but the EV charging station arm ended up incurring an operating loss of 4.3 billion won last year.