SK Innovation to produce battery cathode materials through JV with Chinese partners

[Photo provided by SK Innovation Co.]

South Korea¡¯s SK Innovation Co. is doubling down on lithium-ion battery business with direct production of cathode materials by setting up a joint venture with Chinese battery makers.

According to industry sources and foreign media reports on Tuesday, SK Innovation has agreed to form a joint venture for cathode material production with Chinese battery maker EVE Energy Co. and battery material producer BTR with a registered capital of 1.95 billion yuan ($303.93 million).

The South Korean company will invest 25 percent in the proposed entity while EVE Energy and BTR are expected to hold 24 percent 51 percent stakes, respectively. The total investment amount has not been disclosed.

The cathode material, key to the lithium-ion battery's capacity, is made by adding lithium to a precursor made from a mixture of nickel, cobalt, and manganese. Cathode materials account for 40 percent of the total manufacturing cost.

The JV plant, which will be set up in China, will have an annual output of 50,000 tons of nickel-rich cathode materials, or 33 gigawatt-hours (GwH) of battery capacity capable of running about 470,000 EVs.

SK Innovation has so far been purchasing cathode materials from Korean supplier L&F Co. It has decided to step up its battery production capacity to secure a stable supply chain and boost price competitiveness by reducing manufacturing costs.

SK Innovation is currently operating joint battery factories with EVE Energy in Yancheng and Huizhou, China, which have begun operations in the first quarter.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]