SK Innovation Invests 890 Billion KRW in Second US Battery Plant

[Asia Economy Reporter Park So-yeon] SK Innovation is investing approximately 890 billion KRW to build a second battery plant in the United States despite the challenges posed by the COVID-19 pandemic.

According to industry sources on the 29th, SK Innovation held a board meeting the previous day and resolved to invest in its electric vehicle battery subsidiary, 'SK Battery America' (SKBA). The company acquired an additional 7,270 shares of SKBA for 894.4 billion KRW, bringing its ownership stake to 100%.

Following the groundbreaking of its first battery plant with a capacity of 9.8 GWh (gigawatt-hours) in Georgia, USA last year, SK Innovation decided to construct a second plant earlier this year, just 10 months later.

The second plant will have a capacity of 11.7 GWh, with construction starting in July this year and mass production planned from 2023. The total construction cost for the second plant is 1.5 billion USD (approximately 1.8 trillion KRW), with about half of the investment approved at this board meeting.

According to SK Innovation, the total investment decided for both the first and second battery plants amounts to 3 trillion KRW so far. The company plans to invest up to 5 billion USD (approximately 6 trillion KRW) in the long term.

SK Group Chairman Chey Tae-won stated at the SK Night event held in Washington D.C., USA in November 2018, "We hope to grow together with American society beyond just expanding our North American business," adding, "The US electric vehicle battery plant is a project with up to 5 billion USD investment that will create about 6,000 jobs."

By 2023, when the construction of both the first and second plants is completed, SK Innovation will have a production capacity of 21.5 GWh in the United States, increasing its global production capacity to 71 GWh.

The company said, "We have taken a step closer to our mid-to-long-term goal of becoming a global battery company with a production capacity of 100 GWh by 2025," and added, "By securing a leading production scale in the United States, the world's largest automobile market, we will contribute to the development of the global electric vehicle industry ecosystem, including the US."

Starting from 2023, when the first and second plants are fully operational, SK Innovation expects to establish a stable supply base for batteries to US automakers, which is anticipated to lead to additional orders.

Kim Jun, President of SK Innovation, said, "In difficult times, boldly investing in future growth engines for deep change is the fundamental way to secure business competitiveness and overcome crises," and added, "This investment will significantly contribute to the global electric vehicle industry through our battery business."

This content was produced with the assistance of AI translation services.