US$775 million factory to produce 7.5 GWh per year, as SK Innovation follows LG Chem and Samsung SDI into Eastern Europe
Following speculation for much of this week, South Korea’s SK Innovation confirmed on November 30 that it is to build its first foreign battery plant in Hungary, with a view to supplying growing European EV manufacturing.
SK Innovation confirmed it would invest 840 billion won (just under US$775 million) in the plant, which will break ground in 2018 and begin production in 2020.
With planned output totalling around 7.5 GWh per year, the site will be almost twice as big as the group’s newly expanded 3.9GWh facility in Seosan, South Korea. This is expected to be sufficient cells for around 200,000 vehicles, and would take the group’s total yearly production to almost 12 GWh.
The 430,000 square metre factory will be sited in the city of Komárom, in the north of Hungary, and already the site of manufacturing plants owned by Audi and Daimler. SK Innovation has confirmed that batteries made in the new facility will be supplied to Mercedes-Benz, although other customers have not been disclosed. The Mercedes deal was first announced in February 2016, but the company also has existing agreements with Kia Motors and China’s BAIC.
However, production was halted at the company’s Chinese plant in January after a trade dispute. China has ruled out subsidies for EVs powered by South Korean batteries as it looks to boost Chinese manufacturing, but the ruling may also have been retaliatory action over Korean deployment of US-made missile defence systems.
Effectively locked out of the Chinese market, the manufacturer has instead been looking to expand outside of Asia.
Yet even with such an investment, SK Innovation is behind the curve. Rival South Korean firm Samsung SDI opened its US$350 million factory in Goed, Hungary earlier this year. When production starts in 2018, the plant is expected to produce enough cells for around 50,000 EVs.
LG Chem is also building a similar battery plant in Poland, and plans to begin production in during the second half of 2017.