SK to build second Hungary EV battery plant

South Korean refiner SK Innovation plans to invest 945.2bn won ($844.3mn) to build a second battery plant in Hungary to take advantage of fast-growing demand from European automakers.

The plant will again be located in the northwest Hungarian city of Komarom, near the Slovakian border, and is scheduled to be completed in next year's first half. Construction is scheduled to begin next month. The new plant will have production capacity of 7.5GWh/yr, enough to power more than 180,000 EVs.

The European expansion is key to SK Innovation's plan to become the world's leading EV battery producer, said chief executive Kim Jun. The new plant will give the company further momentum in a fast-growing market underpinned by strict EU environmental regulations.

Both Hungarian plants are scheduled to be ramped up to full-scale production by early 2022. SK Innovation aims to have global EV battery output capacity of 60GWh from its current 4.7GWh by the end of that year. It last year raised its 2022 capacity target to 55GWh from 20GWh. South Korea's largest battery producer LG Chem earlier this month raised its 2020 capacity target to 100GWh.

The latest Hungary plant was sanctioned three months after the company announced plans to build a 9.8GWh EV battery plant in the US state of Georgia. South Korean firms are setting up production centres in South Korea, China, Europe and North America to capitalise on rapid demand growth in the world's largest EV markets. Global EV sales doubled last year to nearly 2mn.

Their prospects in Europe were boosted last year by supply agreements signed with German automaker Volkswagen Group. SK Innovation's deal also includes supplying batteries for Volkswagen EVs sold in North America.

SK Innovation said it also plans to spin off its electronic materials business, which is one of the world's largest makers of lithium-ion battery separators.