SK Innovation will build a second electrical vehicle battery production plant in China by investing 580 billion won. The company is also likely to set up a joint venture (JV) with Volkswagen, which plans to build a battery cell plant in western Germany by investing one billion euros.
SK Innovation held a board meeting on May 14 to approve a plan to build a new battery production plant in China with an investment of 579.9 billion won. The company plans to set up a local subsidiary to implement the project. Details of the investment plan such as the plant site and scale have yet to be finalized, an SK innovation official explained.
The aggregate value of the investment projects that SK Innovation has approved over the past one year period exceeds 5 trillion won. In March last year, the company began to build its first overseas production base in Hungary, and since then, has put forward investment plans including the construction of a new battery factory in Georgia, the United States.
"We believe that we should make timely investments to take the lead in the fast-growing electric car battery industry,” the official said. “We will continue to build and expand facilities in order to ramp up our production capacity to 60 GWh by 2022." The production capacity of 60 GWh can supply 30 kWh batteries to one million electric cars per year.
In August last year, SK Innovation broke ground for the construction of a state-of-the-art electric vehicle battery factory in Changzhou, Jiangsu Province, in cooperation with its Chinese joint venture partners including Beijing Automobile Works. As a consequence, SK Innovation became the first Korean company to break ground for a factory that produces mid- to large-sized batteries in cooperation with Chinese automakers and overseas battery makers. The factory is under construction on a 300,000-square-meter site. When completed, it will have a 7.5 GWh capacity that can supply batteries to about 250,000 units of electric vehicles. The construction of the factory will be finished in the second half of this year and begin its commercial production in the first half of 2020.
In addition, SK Innovation will have a combined production capacity of about 40 GWh in 2022 when the first and second plants in Hungary and the plant in Georgia, the United States are all completed. The company began to build the first plant in March, 2018, the second plant this past February in Hungary and held a ground-breaking ceremony for the plant in Georgia, the United States this past March. As of the end of March, SK Innovation's order backlog reached 430GWh, about 13 times as much as its order backlog at the end of March 2016.
In the meantime, Volkswagen, a major partner of SK Innovation, decided to invest 1 billion euros in battery cell production at a facility in western Germany on May 14, said Reuters and other foreign news outlets. The local media are positively forecasting that Volkswagen will build a factory and complete it in 2022 by setting up a joint venture with SK Innovation.