SK Innovation has started investing in its second plant in Georgia, U.S. The Georgia plant 2 will produce batteries for Ford's electric vehicles. The estimated worth of investment reaches 2 trillion won. SK Innovation is advancing its entry into the rapidly-growing U.S.electric vehicle market.
According to the industry on the 21st, SK Innovation has placed an order forequipment for the second plant in Georgia. Georgia plant 2 is currently under construction. It has understood that SK Innovation has begun to purchase battery production equipment as construction nears completion.
Earlier this month, SK Innovation signed a contract with mPlus CORP. to purchase a secondary battery manufacturing facility worth about 41.1 billion won. mPlus is a company that manufactures battery assembly equipment such as Notching, Stacking, and Tab Welding. It supplies specialized equipment for the pouch type battery, the primary product of SK Innovation.
SK Innovation signed an assembly equipment contract worth 13.5 billion won with Youil Energy Tech.Youil Energy Tech also manufactures Notching, Stacking, and Tab welding equipment.
SK Innovation placed an order for an inspection equipment. Innometry CORP. announced on the 18ththat it had received an order for X-ray inspection equipment worth 3.9 billion won.
mPlus,Youil Energy Tech, and Innometry did not disclose their co-contractors, but their equipment were identified to be installed at SK Innovation's Georgia plant 2.
This is the first time SK Innovation has placed an order for equipment for Georgia plant 2. It is understood that SK Innovation is trying to build a production line in batches, because SK innovation ordered all equipment necessary to assemble and inspect batteries.
Georgia plant 2 plans to have a production capacity of 12 giga watt hours (GWh). The estimated worth of the investment is between 1.8 trillion and 2 trillion won. SK Innovation has announced that it will invest a total of 3 trillion won in the first plant (8GWh) and second plant. The second plant is expected to be completed early next year, and it will mass-produce and supply products by 2023. It will supply batteries to Ford’s pure electric vehicle (F-150), which is the second-largest carmaker in the U.S.
SK Innovation appears to be aggressively investing in the U.S.after the battery dispute with LG Energy Solution has ended. After a battery agreement with the U.S. International Trade Commission (ITC) in April, SK Innovation announced an electric vehicle battery joint venture (Blue Oval SK) with Ford in May, and began to invest in the second plant in June. SK Innovation has been more aggressive as an uncertainty in the U.S.business has subsided. SK Innovation’s will is to stay in the U.S.electric vehicle market, which is expected to grow explosively under Biden’s eco-friendly policy.
The U.S.electric vehicle market is expected to grow at a CAGR of 25%, from 2.4 million units in 2025, 4.8 million units in 2030, and 8 million units in 2035. This is an increase from the previous estimate of 1.5 million units in 2025. SK Innovation considers the U.S.electric vehicle market as an opportunity to grow.
SK Innovation's facility investment is also expected to revitalize the downstream industry. Domestic secondary battery equipment manufacturers are recognized for their competitiveness in the global market. Swedish battery manufacturer North volt AB is showing interest in Korean equipment while using Chinese equipment.
A representative from SK Innovation said, “We will target the rapidly-growing U.S.battery market by completing the first and second plants in the U.S. Once a joint factory is established with Ford, we will be able expand our dominance quicker in the market.”
By Staff Reporter Gun-il Yun and Ji-woong Kim
(benyun@etnews.com) (jw0316@etnews.com)