SK Innovation to Invest 1.2 Trillion KRW to Establish Battery Plant 2 in Yancheng, China (Comprehensive)

1.2 Trillion Won Investment to Be Covered by Newly Established Battery Corporation
Investment Aimed at Achieving 200GWh Battery Production Capacity by 2025
Ongoing Discussions with Ford on Additional Investment in Europe

[Asia Economy Reporter Hwang Yoon-joo] SK Innovation will invest about 1.2 trillion KRW in installments to establish a second battery plant in Yancheng, China.

According to the Financial Supervisory Service's electronic disclosure system on the 1st, SK Innovation decided to invest in 'SK Battery Yancheng' in China. The equity acquisition amount is approximately 1.2326 trillion KRW, and the acquisition method is cash investment, the company disclosed.

SK Innovation explained the investment background, stating, "The investment is scheduled to be made in installments from September 2021 to December 2024, and the amount and timing of the investment may change depending on consultations with the issuing company and approvals from related institutions."

This investment is part of a strategy to expand production capacity from the current level of 40GWh to 85GWh in 2023, 200GWh in 2025, and over 500GWh by 2030.

SK Innovation is making aggressive investments in major electric vehicle markets such as China, the United States, and Europe. In China, it operates battery plants in Changzhou (7GWh), Yancheng (10GWh), and Huizhou (10GWh). This investment is an additional investment in Yancheng, but the annual production capacity has not been disclosed.

In the United States, following the Georgia Plant 1 (9.8GWh), Georgia Plant 2 (11.7GWh) is under construction. Previously, SK Innovation established a joint venture (BlueOvalSK) with the American automaker Ford to build a battery plant with a capacity of 60GWh.

Hungary was selected as the European base, operating Kom?rom Plant 1 (7.5GWh) and planning to start commercial operations of Plant 2 (10GWh) within the year. The industry expects that additional investment plans with Ford will be announced as early as this year.

Jidong Seop, head of SK Innovation's battery business, said during the Q2 earnings conference call, "The initial investment scale with Ford's joint venture is being discussed at around 60GWh, but the possibility of cooperation up to 180GWh by 2030 is also open." Europe is known to be the most likely location for additional investments.

An SK Innovation official said, "The 1.2 trillion KRW investment in Yancheng Plant 2 is not an investment made by SK Innovation before the battery business spin-off, but will be made in installments until 2024," adding, "The main investment funds are expected to be executed from next year, and most of the burden will be borne by the newly established battery corporation."

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