SK Innovation is aggressively expanding its EV battery business and market share

13 May 2020, 05:24:37

SK Innovation is aggressively expanding its EV battery business and market shareSK Innovation is accelerating its EV Battery business post-Covid-19 crisis. It is continuing to expand its global production base by winning contracts for supplying batteries to global automakers.

At the end of April this year, SK Innovation decided to invest in the US to build a second battery factory. In 2017, SK Innovation had an annual production capacity of 1.7 GWh. It expanded to 4.7 GWh at the end of 2018 due to the expansion of the Seosan plant. At the end of last year, 7.5GWh plants were completed in China and Hungary, respectively, and production capacity was greatly increased to 19.7GWh. In 2020, production capacity will continue to expand and will reach 40 GWh at the end of the year - this is an approximately 20 times increase in three years.

In this regard, Kiwoom Securities researchers Lee Dong-wook and Kim Min-sun said in a report on May 13, "SK Innovation plans to aggressively expand its battery production capacity despite the global economic downturn caused by Corona 19. SK Innovation announced last month that it would invest approximately 900 billion won to build a second battery plant in the United States. The production capacity of this plant is expected to start mass production from 2023 at 11.7 GWh. Production capacity is expected to increase to 60GWh in 2022 and 71GWh in 2023.

According to the market research institute SNE Research, SK Innovation ranked 7th in the global EV battery deployment with a 4.5% share for Q1 of 2020. It has been on the rise since entering the top 10 for the first time last year. The market share has more than doubled from 0.8% in 2018 to 1.7% in 2019. In addition, SK Innovation is planning to enter the global top tier, as the Changzhou plant in China and the Komarom plant in Hungary, which were completed at the end of last year, are ready for commercial production.

As such, SK Innovation continues to invest by expanding its battery production base aggressively and improve profits. In the first quarter of this year, SK Innovation's battery business narrowed the deficit by reducing operating losses by 7.5 billion won from the previous quarter. Reducing losses despite high input costs means that profits are appearing as full-fledged sales are made. In particular, the Covid-19 crisis is expected to affect sales this year, but the industry predicts that SK Innovation will generate 1 trillion won in sales for the first time in the battery business.Source

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