SK Innovation to get bigger US battery cell factory

The first U.S. battery cell factory of the South Korean manufacturer SK Innovation, which was announced in November, could prove far more extensive than originally planned. SK Innovation is considering investing up to an additional 5 billion dollars in the factory in the U.S. state of Georgia.

Initially, an investment of around one billion dollars was planned for the factory to produce battery cells with a total capacity of 9.8 GWh annually from 2022 onwards. If SK Innovation actually invests an additional 5 billion dollars in the factory, as now indicated, this would entail a significantly higher output.

Construction of the US factory in Commerce, which lies about an hour northeast of Atlanta, is scheduled to begin this year. Around 2,000 jobs are expected to be created.

SK Innovation has so far only operated battery production facilities in its home country but is already planning to build production capacities in Hungary and China, among other countries. The South Korean battery specialist currently supplies its cells to several major automobile manufacturers, including Daimler, Hyundai and soon Volkswagen, but has not picked up any US American customers. In comparison, competitor LG Chem already has a factory in Michigan and supplies batteries to General Motors, among others.

In this respect, the construction of the US production plant can certainly be regarded as a strategic step. Potential U.S. customers or not, SK Innovation can be sure to reach existing or lucrative foreign customers from the new U.S. location: Hyundai, Daimler and Honda have plants in Alabama, for example. Mazda and Toyota are also currently building a joint production site there, and Kia is represented in Georgia. In addition, Volkswagen’s plant in Chattanooga is not far away.

Only recently it was made known that the battery cell manufacturer plans to increase its global production capacity more than tenfold over the next four years. The outlook came only a few days after Daimler announced that it would procure battery cells with a total volume of over 20 billion euros by 2030.

Update January, 10, 2019: Growing demand from the automotive sector has prompted SK Innovation to increase investment in cell production facilities ever more. According to Bloomberg, the South Korean manufacturer plans to spend an impressive 10 billion dollars by 2025 in order to increase its production capacity to around 100 GWh per year by then.

autonews.com, bloomberg.com (Update)