SK to bolster EV battery business
By Kim Yoo-chul
SK Innovation said Sunday that it will start battery production at a plant in China in the latter half of the year.
In a statement to The Korea Times, the battery-making affiliate of the SK Group said it will increase investment to expand capacity there because it sees growth potential in China’s EV market.
“As an initial step, SK Innovation plans to operate our battery-pack plant in China with an annual capacity of 10,000 packs for EVs by the second half of the year,” said the company. A battery-pack is a set of any number of individual battery cells.
In January this year, SK Innovation, the owner of Korea’s biggest refiner SK Energy, formed a joint venture, Beijing BESK Technology, with China’s state-run Beijing Automotive Industries Holdings and Beijing Electronics Holdings, the world’s No. 5 LCD manufacturer.
It said top management believes that the collaboration will be a catalyst to expand its share in the expanding Chinese EV market.
China is expected to become the world’s single largest EV market by 2020 with Beijing increasing subsidies to EV buyers.
The company said the Chinese plant will increase its annual output capacity to 20,000 EVs by 2017, with the aim of generating 1.2 billion yuan or some 210 billion won in annual revenue by that year, which it believes is the level necessary to become the biggest battery manufacturer of EVs in China.
The group affiliate has agreed with Kia Motors to provide batteries in new EVs made by Kia.
“Kia’s new Soul EVs will be coming in the first half of 2014. SK Innovation has been partnering with Kia for the last three years to develop customized batteries to be used in the upgraded model,” it said.
The battery-pack developed by SK’s local plant in Seosan, will be used in the new Soul.
“As Kia plans to roll out the new EVs in the United States and Europe within the third quarter of this year, we hope to be recognized as one of the most trusted battery suppliers in the industry.”
SK Innovation is in the final process of expanding its battery facilities in Seosan, South Chungcheong Province. After completion, the annual capacity for battery-packs will be increased to 20,000.
“SK-Continental E-Motion, another EV battery joint venture with German-based autoparts maker Continental AG, and Beijing BESK Technology are the two axes to boost our battery business. SK Innovation hopes to become a leader in the market,” said the statement.
During a recent organizational reshuffle, it has created the so-called company-in-company division by integrating the battery-development division and the new business development division. “We expect to report profits from the latter half.” the statement concluded.