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SK Innovation mulls setting up battery plant with VW

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By Nam Hyun-woo
  • Published KST
  • Updated KST

An SK Innovation researcher holds the company's electric vehicle batteries in this file photo. / Courtesy of SK Innovation

By Nam Hyun-woo

SK Innovation will likely cooperate with Volkswagen to build and operate multiple electric vehicle (EV) battery plants in Europe, according to German reports and industry sources, Tuesday.

It is interpreted as the company's latest effort to diversify its semiconductor- and oil-centric portfolio, following CEO Kim Jun's remark that “battery will be the new chip for SK Innovation.”

Germany's Manager Magazin reported that Volkswagen is considering its own mass production of battery cells for EVs and is “planning a multi-billion dollar cooperation with SK Innovation,” naming Volkswagen CEO Herbert Diess is behind the project.

It is interpreted as German automobile giant's efforts to meet its own goal of manufacturing 3 million EVs in 2025. To supply the volume, the company has dropped hints that it will come up with its own battery cell facilities, saying it should not rely on several Asian battery makers.

Currently, Volkswagen orders the cells, especially from the Korean producers LG Chem and Samsung SDI.

Neither Volswagen nor SK Innovation confirmed their partnership, with an SK Innovation official saying “we cannot deny or confirm the project,” but industry sources say the two firms will likely strike the deal.

SK Innovation, Korea's third and the world's sixth largest battery maker, has been underscoring its battery making business in recent years.

In the first eight months this year, SK Innovation produced 428.9 megawatt-hours, showing a 160 percent growth from a year earlier. It was the sharpest growth among global battery makers.

SK Innovation is expanding the capacity of battery plant in Seosan, South Chungcheong Province, to 4.7 gigawatt-hours, and building a 7.5 gigawatt-hour factory in Hungary with a goal to complete it by 2022. When all of these are completed, SK Innovation's yearly EV battery capacity will reach 20 gigawatt-hours.