The converse relationship between oil refineries and the battery industry has finally come to a head as one of the largest consumers of oil – vehicles – is now making a strong transition towards newer battery power sources. In fact, the electric vehicle (EV) battery market is expected to grow by more than USD 18 billion by 2020, according to B3, a Japanese market research firm specializing in lithium-ion batteries. The result is that oil refiners who for decades have experienced sheer growth in the industry are now left with the reality of a declining oil market, and those who aren’t willing to change with the times may be left in the remnants of a once-thriving oil industry.

Indeed, South Korea’s leading oil refiner SK Innovation is such one of these industry leaders who is contemplating their new role in the changing energy market. For the first time in 37 years, SK Innovation suffered an operating loss, fueling their interest in the EV battery market. At the same time, eco-friendly cars focused on cutting CO2 emissions are growing exponentially, poising them at the forefront of the energy and fuel industry as a fast-rising and quickly-expanding market with potential for long-term growth and profits for those providing new battery technologies. Investing in the battery business is a matter of logic and profits, and SK Innovation is quick to the start as they’re feeling the pressures of the oil industry decline.

Unfortunately, as with any quickly-expanding market comes the volatile roller coaster of demands and successes. The EV battery market, while having gained momentum and traction, has failed to sustain its interest in the eyes of consumers for a variety of reasons. The idea of an electric car hits a chord with newer generations who tend to take more interest in environmental concerns, but the fact of the matter is that there’s a disconnect in that interest versus an actual purchase. The reasons are still being sorted out, but likely culprits include slow battery charging times as well as a lack of infrastructure in emerging nations where capturing new markets like battery-powered vehicles is essential to having a lasting impact on future electric vehicle purchases. Additionally, falling oil prices are quick to lure customers away from a new car purchase, keeping them within the familiarities of gasoline- or diesel-fueled vehicles.

Thus, while the EV battery market is opening another window of opportunity for oil players such as SK Innovation, full-throttle backing from leaders in the oil industry will likely still take years. Oil refiners willing to change with the times recognize the challenges in the battery industry but foresee the potential growth, giving them enough motivation to invest in highly-efficient, affordable battery technology with the hopes of reaping profits in the future.