SK breaks ground on EV battery plant in Georgia

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SK breaks ground on EV battery plant in Georgia

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From left: The construction site of SK Innovation’s EV battery plant in the U.S. state of Georgia. U.S. officials and SK executives pose at the groundbreaking ceremony held Tuesday. Among them were SK Group Vice Chairman Chey Jae-won, fifth from right, and U.S. Secretary of Commerce Wilbur Ross, fourth from left. [SK INNOVATION]

SK Innovation started construction on an electric vehicle (EV) battery plant in the U.S. state of Georgia Tuesday, in which it will invest $1 billion through 2022.

This is the company’s third overseas battery factory after China and Hungary. SK is aiming to start mass production at the site in early 2022. Sitting on a plot of 1.1 million square meters (271.8 acres), the facility will have two production lines with a capacity of 9.8 gigawatt hours per year, double the amount of SK’s battery plant in Seosan, South Chungcheong.

On Tuesday, SK held a groundbreaking event at the Georgia construction site.

“With ground breaking in Georgia, the company now has production bases in all major EV markets - the United States, Europe and China,” said SK Innovation CEO Kim Jun.

After the construction is completed in 2022, SK plans to invest an additional $670 million through 2025 to add facilities to the site. By then, the company expects to have hired 2,000 staff.

U.S. government officials attended the event including the secretary of commerce, Wilbur Ross.

“This major investment by SK in Georgia is evidence that our work to make the United States the best place in the world to invest has been fruitful,” Ross said. “Innovative products and the processes to make those products are revitalizing the U.S. economy, which is growing faster and creating more jobs than it has in decades.”

Georgia is located near factories of global carmakers like Volkswagen, BMW, Volvo, Ford, Hyundai and Kia Motors. The Georgia site was decided after SK received EV battery orders from Volkswagen.

“Most global carmakers require battery suppliers to be located within 500 kilometers [310 miles] of their factories - building plants in Europe, China and the United States was a necessity,” Kim told Korean reporters after the groundbreaking event Tuesday.

Originally having started out in refining and chemicals, SK Innovation started making car batteries in 2005 to diversify its business portfolio.

Global research company Allied Market Research projects that from 2018, the EV battery market will grow at an average 17.2 percent per year to reach $84 billion by 2025.

SK Innovation has made big investments overseas. Plants in Hungary and China are currently under construction and due to start mass production next year. Once all three factories start operations, SK Innovation will have an annual capacity of 60 gigawatt hours by 2022.

SK’s rank in the global EV battery market last year was 16th in terms of the amount of its products deployed in EVs, according to SNE Research. Its Korean rivals were higher up the list with LG Chem at fourth and Samsung SDI at eighth. In the interview, CEO Kim said his goal was to place within the global top three between 2022 and 2023. At the moment, SK’s EV battery business is losing money.

“I’m expecting the business to go into the black in 2021,” Kim told reporters. “When the battery business grows big enough, the plan is to spin it off into a subsidiary. … I believe the EV battery market has full potential to be a ‘second semiconductor’ [industry].”


BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]
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