SK Group to Build EV Battery Production Facilities in China

Chey Tae-won, chairman of the SK Group, has begun to make a bold move to expand its electric vehicle (EV) battery business. He is pushing for the establishment of production plants in the U.S. and China, the world's two largest markets, in his bid to make EV batteries as the group's post-semiconductor growth engine.

SK Innovation announced on October 7 that the company would open a lithium-ion battery separator/ceramic coating separator plant in Changzhou, Jiangsu Province of China.

The factory will be built on a site of about 140,000 square meters in the Jintan Economic Development Zone in Changzhou. The investment scale will total about 400 billion won and build four lithium ion battery separator production facilities and three ceramic coating separator facilities. Ground will be broken in early next year. The facilities will begin to roll out products in the third quarter of 2020 and supply them to makers of electric vehicle batteries and information technology (IT) devices.

Their annual output will reach 340 million square meters of li-ion battery separators and 130 million square meters of ceramic coating separators. When the facilities are completed, SK Innovation will be able to produce 850 million square meters of li-ion battery separators. Then, second-placed SK Innovation will narrow its gap with the world’s first ranker in terms of wet lithium ion battery separator market share.

SK Innovation has set up SK High Tech Battery Materials (Jiangsu) in China as its wholly owned company to make this investment. “This investment has laid the foundation for our plan to jump to the top of the world wet separator market from the current second," said Kim Joon, CEO of SK Innovation.

SK Innovation is considering building a new electric car battery plant in the U.S. SK Innovation is seeking to secure local production facilities in the U.S. as electric car makers are ramping up their production volume. Yet the company has not finalized the plant’s site and size.

"We need to secure a production base by region," CEO Kim told reporters earlier this month about the construction of the plant in the U.S. “Candidate sites have been narrowed down to four.”

Once SK Innovation completes and runs a production facility in the U.S., it would be its fourth production base, following those in Korea, Europe and China. LG Chem also has secured a production base in each of the four regions.

SK Innovation decided to build its European plant in Hungary earlier this year. The company’s goal is to elevate the current production capacity from current 1.9 GWh per year to 50 GWh per year in 2025.