SK On invests $2.53 bn to build fourth EV plant in China

SK On Co., pure-play battery unit recently spun off South Korea’s SK Innovation Co., will invest $2.53 billion to build its fourth EV battery in China in 30 Gigawatt-per-hour (GWh) annual capacity under direct management for shipments devoted to the world’s largest EV market.

According to foreign media outlets and industry sources on Thursday, SK On has recently signed a $2.53 billion investment contract with Yancheng city in Jiangsu Province, China, to build a new factory. The company has already invested $1.06 billion in its local entity for the expansion in September.

SK On plans to launch construction of its new battery cell as early as next year for the goal of mass production from the end of 2023.

The factory will produce pouch-type lithium-ion batteries for China with 30GWh capacity, which is sufficient to produce 450,000 high-performance electric vehicles.

The factory will be SK On’s first independently-operated plant in China. The other three electric vehicle battery plants in Changzhou with annual capacity of 7 GWh, Yancheng with 10 GWh, and Huizhou with 10 GWh are in joint ventures. The Changzhou plant was set up jointly with Beijing Automotive Group, the others in Yancheng and Huizhou with Chinese battery manufacturer EVE Energy.

The company engaged in 5.1 trillion won ($4 billion) project to add 129Gwh capacity in the United States aside from $8.9 billion won joint venture with Ford is beefing up investment in China to ride on the race to go green on the roads between the two largest economies and meet its goal to double capacity to 85GWh next year from 40GWh and achieve 500GWh by 2030.

The Chinese government has introduced policies to expand electric vehicle supply with the goal of halting sale of diesel locomotives in 2040.

SK On, currently No. 5, is expected to scale up through broad investments across Korea, U.S., China, and Hungary.

Shares of SK Innovation were trading 0.84 percent lower at 237,500 won on Friday morning.

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