SK On Decides to Produce Pouch-type LFP Batteries

SK On, a battery subsidiary of SK Innovation that is speeding up the development of lithium iron phosphate (LFP) batteries, has decided to produce pouch-type LFP batteries.

LFP batteries are mainly produced by China's CATL and BYD, and these companies specialize in the prismatic type. Jumping into the LFP battery market, SK On has decided to take on the Chinese makers with a pouch-type battery.

Tesla has recently applied LFP batteries to its entry models. Daimler, Volkswagen, and Ford are also considering introducing LFP batteries. SK On intends to get a piece of the growing pie. The company has already made considerable progress in developing a pouch-type LFP battery.

A pouch-type battery offers high space efficiency, which helps increase energy density. In addition, a pouch-type battery is about 10 percent lighter than a prismatic battery and easier to use various battery designs.

Currently, CATL and BYD produces prismatic-type LFP batteries, and they have increased energy density by applying cell to pack (CTP) technology. Battery packs for electric vehicles are expanded from cells to modules to packs. CTP technology increases energy density by more than 20 percent by omitting modules and enlarging cells instead.

SK On is considering producing a "B sample" as early as next year and providing it to automakers around the world. A B sample is a sample with the highest completeness among samples produced on the pilot plant (intermediate test plant) or research stage. The next is the "C sample," which is a sample manufactured just before commercial operation.

SK ON signed an agreement with the Korea Electrical Research Institute (KERI) to create technologies and standards that maximize the safety of lithium-ion batteries.

Meanwhile, SK On is planning to invest three trillion won to expand its battery plant in China. The company recently signed an investment agreement with Yancheng City, Jiangsu Province of China to expand its battery plant. In September, SK On invested US$1.06 billion in its Chinese subsidiary to finance the plant expansion.

SK On plans to start the construction of its battery cell plant as early as next year and start mass production at the end of 2023. The plant will mainly produce pouch-type lithium-ion batteries for use in China, and the plant’s production volume will reach 30 gigawatt hours (GWh) per year. This quantity can go into about 450,000 high-performance electric vehicles every year.

SK On is currently operating EV battery plants in three regions in China -- Changzhou (7GWh), Yancheng (10GWh), and Huizhou (10GWh). The Changzhou plant was jointly established with BAIC, and the Yancheng and Huizhou plants are operated as joint venture plants with Chinese battery manufacturer EVE Energy. SK On's fourth Chinese battery plant, which will be newly built in Yancheng, will be run independently without partnering with a local company.

Despite concerns over international supply chains caused by the U.S.-China trade dispute, SK On will invest trillions of won in China in consideration of the rapid growth of the Chinese electric vehicle market. The Chinese government is implementing policies to expand the supply of electric vehicles to suspend sales of internal combustion engine-powered cars by 2040. With this investment, SK On is expected to further solidify its production network connecting Korea, the United States, China and Hungary.