SK Innovation has reportedly started building its first battery cells giga plant in China – with the goal of establishing a production “triangle” encompassing China, Korea and Europe.
The South Korea-based company, whose businesses include oil refining and chemicals, told local media it had started preparing the site for the new factory in Changzhou, Jiangsu Province.
The move into China comes as SK Innovation is building another electric vehicle (EV) battery plant in Hungary while also expanding cells production in its home country.
“We expect to create a manufacturing triangle spanning Korea, Europe and China, realising a vertical integration for our battery business,” an SK Innovation spokesperson told Maeil Business News Korea.
The China plant will supply the Korean firm’s Chinese joint venture partner with battery packs to be used in vehicles produced by Mercedes Benz and others. Until now, SK Innovation has relied on its Seosan plant in Korea to ship the cells to China.
The new plant aims to produce 7.5 gigawatt-hours worth of battery cells a year. The company said it also plans to scale up its Korean battery plant to 4.7GWh annually.
The move means SK Innovation is set to become the latest Asian battery ‘tiger’ to break into the Chinese market – where it already has a lithium-ion battery separator business – and further evidence if needed of Asia’s momentum towards dominating global production for EV batteries.
And the China operation will see SK Innovation also move closer to its stated goal of taking nearly a third of the global EV battery market by 2025 – as BEST Battery Briefing reported last year.
China is already playing host to Asian EV battery manufacturers such as Japan’s Panasonic, Korea’s LG Chem and Samsung SDI, in addition to its domestic battery-making giants.