SKI to Build Second EV Battery Plant in US

South Korea's SK Innovation Co Ltd (SKI), a supplier for Volkswagen and Ford Motors, plans to invest 6.6 billion to build a second battery plant in the US. The company and the Georgian government signed an investment contract of US$940 million (approximately RMB 6.6 billion). Construction of the plant with an annual capacity of 11.7 gigawatt-hours of batteries will begin in July in the southern state of Georgia with production aimed for 2023, the firm, already building its first factory there, said in a statement.

SKI personnel have said that the advantage of building a second battery factory in the United States is that there is no need to export batteries from other countries to the United States, which can avoid tariffs and meet the needs of local car manufacturers for power batteries.

Volkswagen is tepid in the North American market. In 2019, VW's cumulative sales in the North American market were 951,500 units, a year-on-year decrease of 0.5%. Although the sales volume of Volkswagen Group in the American market is far less than the Chinese market (in the whole year of 2019, the Volkswagen brand completed sales of 4.23 million units in the Chinese market, an increase of 0.6% year-on-year.), it is obvious that the US market is Volkswagen's is the top market.

Ford's position in the United States is one of the national automobile brands. The 2019 America auto market sales list shows that the Ford brand won first place in America with 2,293,984 units. The second is Toyota, which sold 2085234 vehicles in the United States throughout the year. Although it is the second place, it is close to Ford by nearly 200,000. In the United States, Ford is still unshakable.

For the large demand for power batteries by Volkswagen and Ford, it is necessary for SKI to build a second battery factory in the United States. It is reported that SK innovation's first battery plant in Georgia, USA, start construction in March 2019. It has a production capacity of 10 gigawatts and a total investment of 1.7 billion US dollars, bringing 2,000 jobs. It is expected to achieve full-load operation by 2025, at that time, the annual production capacity could reach the battery demand of 250,000 electric vehicles.

Affected by the epidemic this year, SKI plans to shrink its 2020 battery sales target by about 10%. When the second battery plant in the US is completed in 2023, with the first battery plant in USA, they will provide the company with a global annual production capacity of 71 GWh in Europe and Asia in total.

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