New plants in China for SK Innovation and CATL

The South Korean battery cell manufacturer SK Innovation has established a joint venture with the Chinese battery specialist EVE Energy to set up its second production facility in China for electric car batteries. CATL is also planning another factory.

But first SK Innovation and EVE Energy: The 50:50 joint venture, in which the partners each invest 525 million dollars according to Korean media reports, plan on building a factory with an annual production capacity of 20 to 25 GWh. The exact location is not yet known.

In May, SK Innovation announced its intention to invest around $480 million in the construction of a second battery plant in China – now the budget has apparently been slightly increased. SK Innovation already has a production facility for electric car batteries in Changzhou, China, and further plants in South Korea, Hungary and the USA. A second factory is currently being built in Hungary.

The joint venture partner EVE Energy is one of the leading manufacturers of battery cells in China. In addition to several domestic OEMs, EVE also supplies EV batteries to Hyundai.

EVE’s competitor CATL is also planning to build another factory. This is to be built in the city of Yibin in the southwestern Chinese province of Sichuan. CATL calculates investments of 10 billion yuan (1.4 billion dollars) for the new plant. The first phase is to be completed within 26 months of the start of construction, the second phase two years later. However, CATL is reluctant to provide any further information in the announcement. Key data such as the planned production capacity or the cell type are therefore not known.

With the new plant in Sichuan, the Group intends to expand its presence in the southwest and improve the supply to Chinese OEM car plants there. In the statement, CATL stated that it would finance the investment from its own resources. Last week, however, the battery cell manufacturer-issued bonds worth up to 10 billion yuan without specifying the exact purpose of the money. As Caixin Global writes referring to insiders, the proceeds from the bond could also be used for the German battery factory near Erfurt and the investment in the Australian mining company Pilbara Minerlas.

koreaherald.com, koreabizwire.com (both SKI), bloomberg.com, caixinglobal.com (both CATL)