[Unstoppable K-Battery] Bold Move with 15 Trillion Won Facility Investment This Year

LG Energy Solution Announces 7 Trillion KRW Domestic Facility Investment
SK On Also Plans 6.5 Trillion KRW Investment in Hungary and North America
Samsung SDI Advances Development of 4680 Battery Cells

[Asia Economy Reporter Oh Hyung-gil] The three major battery companies are pouring 15 trillion won into facility investments this year alone. As automakers, including Tesla, join the fray, securing battery production capacity is becoming increasingly important to dominate the rapidly growing electric vehicle market. Despite global complex crisis variables, the pace of overseas and joint venture investments, excluding some factories, is unlikely to slow down.

According to the industry on the 2nd, LG Energy Solution, SK On, and Samsung SDI are expected to significantly increase their capital expenditures (Capex) this year. First, LG Energy Solution raised its Capex for this year from the previous 6.3 trillion won to 7 trillion won. In the first half alone, it recorded 2.7 trillion won, nearly doubling the 1.4 trillion won from the same period last year.

LG Energy Solution is focusing on expanding production facilities both domestically and abroad. It is investing 580 billion won by October next year to expand the 4680 cell equipment, a next-generation cylindrical battery, at its Ochang Plant 2. The annual production capacity will be about 9 GWh, enough for 135,000 electric vehicles.

Additionally, through the joint venture Ultium Cells with US GM, the Ohio Plant 1 will start mass production within this year. Battery pack production is scheduled to begin in the second half of this year, with equipment investment currently underway. Next year, Plant 2 in Tennessee and Plant 3 in Michigan are scheduled to start mass production in 2025. Furthermore, the Poland plant plans to double its battery production line for Ford by next year.

There is also a high possibility that LG Energy Solution will resume investment in its Arizona plant in the US, which was under reconsideration. At the Q2 earnings conference, LG Energy Solution stated, "This is not due to business fluctuations such as weak customer demand, and we expect to announce it in the near future."

[Image source=Yonhap News]

SK On also announced facility investments of up to 6.5 trillion won annually. It plans to operate its Hungary Plant 2 and US Georgia Plant 1 this year, increasing production capacity from 40 GWh at the end of last year to 77 GWh by the end of this year. This capacity is enough to produce batteries for about 1,155,000 electric vehicles.

Last month, SK On’s US subsidiary, SK Battery America, conducted a rights offering to invest 1.2 trillion won in BlueOvalSK, a joint venture with Ford.

Samsung SDI spent 1.15 trillion won on facility investments in the first half of the year, a 51% increase compared to 760 billion won during the same period last year. Large-scale investments are also planned for the second half, and the total investment is expected to exceed last year's 1.7 trillion won.

Samsung SDI will invest 1.7 trillion won by 2025 to expand its Malaysia Plant 2. It plans to produce cylindrical Prismatic 21700 (21mm diameter, 70mm height) batteries, aiming for the first mass production in 2024. It is also preparing to operate Hungary Plant 2 and is expected to start operating 4680 battery cell development and testing facilities.

The battery industry expects continuous facility investments to follow. An industry insider said, "As battery order competition intensifies, automakers are focusing not only on research and development (R&D) but also on how much production capacity has been secured and whether investments are proceeding as planned," adding, "Strengthening profitability during the process of external expansion is also an essential factor."

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