SK Innovation Co. will inject 1 trillion won (US$919.12 million) in expansion of the electric vehicle (EV) battery and lithium-ion battery separator (LiBS) sectors.
The company announced that it has decided to invest 200 billion won (US$183.82 million) in expanding its LiBS production facilities at the information electronic material plant in Jeungpyeong, North Chungcheong Province, and its EV battery plant in Seosan, South Chungcheong Province, at the board meeting on November 29. In particular, it will also spend a total of 840.2 billion won (US$772.24 million) on establishing its European EV battery plant in Hungary as promised in May this year.
Out of the 200 billion won (US$183.82 million) investment in South Korea, 150 billion won (US$137.87 million) will go to expand the LiBS lines 12 and 13 at the Jeungpyeong plant. When the expansion is completed by the second half of 2019, SK Innovation will see its annual LiBS production capacity increase to nearly 500 million square meters and chase down Japan’s Asahi Kasei, the world’s number one company.
The company will expand its EV battery production facilities in South Korea and Europe at the same time. In South Korea, SK Innovation will expand its production line 7 with a capacity of 0.8 gigawatt hours (GWh) per year at the second battery plant in Seosan, South Chungcheong Province. When the line 7 is completed, the company will have a battery production capacity of 4.7 GWh, including the facilities now in operation, in South Korea alone.
In addition, SK Innovation will make a total of 840.2 billion won (US$772.24 million) investment in stages in Hungary, a bridgehead for Europe. The battery plant in Hungary to be established on the site of 430,000 square meters will have an annual production capacity of 7.5 GWh. Construction will begin in February next year. The plant will also start mass production from early 2020. SK Innovation, which signed a battery supply contract with German automaker Daimler, which owns Mercedes-Benz, has decide to designate the Hungarian plant as the outpost for the European EV market invasion.
First of all, SK Innovation has now secured the system that can compete with global companies in the EV battery production and LiBS sectors. The company will have the economy of scale as its annual battery production capacity will increase to 12.2 GWh by 2020. Accordingly, it can compete intensively with Japan’s AESC and Panasonic, China’s Biyard and Contemporary Amperex Technology Co. Limited (CATL) and South Korea’s LG Chem and Samsung SDI. LG Chem, the largest battery producer in South Korea, has an estimated production capacity of 10 GWh, while Samsung SDI has more than 7 GWh.
Market watchers say that it will not take long for South Korea to rank first in the separator sector in where the country secured a wet separator manufacturing technology for the third time in the world. Japan’s Asahi Kasei has the largest market share with 19.7 percent, followed by SK Innovation with 15.4 percent and Japan’s Toray with 14.6 percent.