SK Innovation will increase the production capacity of its Yancheng plant, one of China's three battery plants, to 32 GWh (gigawatt hour). Through this, it will expand China's battery production to 50GWh, an 85% increase from the current (27GWh). SK Innovation will respond to global auto demand in China, the world's largest electric vehicle market, by dividing the battery business and expanding production.
SK Innovation announced on the 16ththat it held a temporary shareholders' meeting at the SK Building in Jongno-gu, Seoul and processed the approval of the dividing the Battery Business and the Petroleum Development (E&P) Business. The proposal was passed with an approval rate of 80.2%. With the approval of this week's general meeting, 'SK Battery' (tentative name) and 'SKE&P' (tentative name) will be officially launched on the 1st of next month.
SK Innovation to increase its sales from 3 trillion won this year to 20 trillion won in 2025, with the electric vehicle battery market growing 30% annually. In order to achieve its sales target, SK needs to continuously expand its battery production capacity.
SK Innovation plans to establish an additional EV battery plant in Yancheng,China this year. It will invest 1,232,600,000,000won to build a 22GWh battery factory. 22GWh is enough to supply batteries for more than 400,000 EVs. The production capacity of a joint plant established by SK Innovation in Yancheng with Chinese battery maker EVE Energy is 10GWh.
An SK official explained, "The investment in the Chinese battery plant is in response to the demand of automakers, and there is a possibility that we will expand the Yancheng plant."
The specific customer has not been disclosed, but it is known that the battery will be supplied to Hyundai Motor Company. SK Innovation is supplying electric vehicle batteries to Hyundai Motor's Ioniq 5 and Kia Niro.
If Yancheng production capacity increases, SK Innovation will have the largest production capacity in China.SK has factories in Yancheng (10GWh), Huizhou (10GWh) and Changzhou (7GWh), China.
SK Innovation’s possibility for initial public offering (IPO) to raise funds for battery investment has also been raised. This is because large-scale investments must be made to expand battery production not only in China, but also in Europe and the U.S.
“We will secure investment resources in line with the growth of the global electric vehicle battery market,” said JunKim, President of SK Innovation.
SK innovation is expanding its business areas, such as energy storage system (ESS) and battery service business (BaaS), as well as electric vehicle batteries. In addition, through battery recycling (BMR), the company plans to promote new battery material businesses such as lithium and cathode materials.
By Ji-woong Kim jw0316@etnews.com