State Aid of US$230mn
Reuters reported on March 22 that Hungary gained EU competition approval to grant 209 million euros (US$230 million) in state aid to SK Innovation’s electric vehicle battery plant, its third in the Central European country.
The European Commission (EC) said the project would help develop the region and create jobs, outweighing any possible distortion of competition in the market due to the government subsidy.
The plant will produce lithium-ion batteries and battery modules for electric vehicles (EVs). SK Innovation is supplying EV batteries to Volkswagen, Ford Motor, and Hyundai Motor Co.
Meanwhile, in January 2021, SK Innovation decided to invest 1,267.4 billion won in its Hungarian subsidiary to build the third electric vehicle battery plant in Hungary. This plant is the largest among SK Innovation’s global production bases for EV batteries.
SK Innovation completed the first battery plant in Hungary, with an annual capacity of 7.5 GWh, at the end of 2019 and is running it. The second plant, with a scale of 9.8 GWh, is under construction and will start mass-production in the first quarter of 2022. In 2021, SK Innovation received 90 million euros (about 121.8 billion won) in support from the EU for the construction of the second plant. The third factory, which is scheduled to start its commercial production in 2024, will have a capacity of 30 GWh., a volume that can power 430,000 EVs.
When the third plant in Hungary is completed, the number of SK Innovation’s global battery production plants will increase to seven, including the Seosan Plant (4.7GWh) in Korea and Huizhou Plant (10GWh) in China. SK Innovation aims to grow into one of the global Top 3 by expanding its battery production capacity to 125 GWh per year by 2025.