What’s new: SK Innovation Co. Ltd. will invest 1.2 trillion won ($1.04 billion) to build a new battery plant in China, a company representative told Caixin on Thursday, as the South Korean company looks to ratchet up its battery production capacity amid growing demand for electric vehicles.
The new factory, which will be located in the city of Yancheng, East China’s Jiangsu province, is part of the company’s strategy to increase its annual battery production capacity to 85 gigawatt-hours (GWh) in 2023, 200 GWh in 2025 and 500 GWh in 2030, according to the representative. Its current capacity is 40 GWh per year.
However, the Yancheng investment will not be made before SK Innovation spins off its battery business, the representative said, without providing specifics.
The background: Last month, SK Innovation announced plans to spin off its mainstay battery business in October into a separate entity provisionally named SK Battery, according to Bloomberg.
A spinoff will make it easier for the battery unit to raise funds for further expansion, Bloomberg quoted Kim Yangseob, head of SK Innovation’s financial division, as saying.
Currently, SK Innovation operates three battery plants in China. The company also has a battery manufacturing presence in the U.S., Hungary and South Korea.
Contact reporter Ding Yi (yiding@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)
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