Korean oil and energy giant SK innovation will expand its battery manufacturing portfolio in the US amid the ongoing global recession.
The company manifested in its official media SKinno News that its board decided to invest KRW 890 billion (USD 727 million) to set the second EV battery factory in the US. The first factory is already under construction in Georgia since 2019, and will start full production in 2022. SK innovation said it will pour a total of KRW 3 trillion into the construction of the two factories to ensure customers a stable supply of batteries. In the longer term, the total investment will reach KRW 5 trillion, the company added.
The newly decided second factory will have 11.7GWh of production capacity. After construction starts in coming July, it will be online from 2023. With the first factory’s 9.8GWh capacity realized, SK innovation would have a total of 21.5GWh/year battery production capacity by 2023 only in the US. By that time, the company’s worldwide capacity would reach 71GWh, achieving a significant milestone for its mid-term goal to have 100GWh capacity by 2025.
The company provided a background of the investment in a bigger picture. In an event held in November 2018 at D.C., Chey Tae-won, Chairman of SK Group (Korean conglomerate that owns SK innovation) mentioned an “up to five-billion-dollar investment project” to create about 6,000 jobs, expressing his hope to “jointly grow with communities in the US.” The latest investment decision is the second phase of the vision, SKinno News explained.
SK innovation added that the investment in the two factories will help the company receive more orders by 2023 thanks to more efficient logistics and more stable battery supply.
The investment is a bold move for the company, which revealed a shockingly weak Q1 performance on May 6. In the first quarter, SK innovation recorded KRW 1.7752 trillion of operating loss with KRW 11.163 of revenue. The company attributes the outcome to weak oil price and the pandemic situation haunting the global economy.