SK Innovation to invest $490m in second EV battery plant in China

FILE PHOTO - The logo of Hyundai Motor is seen on the steering wheel of a Sonata sedan car during its unveiling ceremony in Seoul, South Korea, March 8, 2017. REUTERS/Kim Hong-Ji

South Korea’s SK Innovation said on Wednesday that it plans to invest 579.9 billion won ($488.30 million) to build its second China factory for electric vehicle batteries, in a bet that China will open up its market to Korean battery makers.

The latecomer to the battery market is aggressively expanding its production capacity globally, starting to build new factories in Hungary, China and the United States since last year with a total investment of 5 trillion won.

SK Innovation said its second China factory aims to meet rising orders for EV batteries globally, without elaborating on its Chinese partner, the site and capacity of the proposed plant.

Shares of SK Innovation, South Korea’s biggest oil refiner, rose 2.7 percent in Wednesday morning trade, in a wider market that was up 0.1 percent.

Reuters reported last month that SK Innovation was in talks to set up separate battery-making joint ventures with Chinese partners and Volkswagen, citing the president of the Korean company’s battery business.

Currently, vehicles equipped with South Korean batteries are not eligible for government subsidies in China, the biggest auto and EV market in the world.

But Korean battery makers including LG Chem have in recent months announced investment plans to expand capacity in China, hoping that China’s plan to phase out subsidies by 2020 would create a level playing ground.

SK Innovation broke ground in August on its first Chinese plant under a joint venture with Beijing Electronics Holding Co Ltd and BAIC Motor Corp Ltd, with investment set to reach 5 billion yuan ($744.30 million) by 2020.

Automakers are under pressure to deliver EVs as China set quotas for sales of new energy vehicles (NEVs). China wants NEVs – which also include hybrids, plug-in hybrids and hydrogen fuel cell vehicles – to account for a fifth of auto sales by 2025 compared with 5% now.

SK Innovation‘s customers include Germany’s Daimler AG and Volkswagen and South Korea’s Hyundai Motor

SK Innovation was sued in April by its bigger rival LG Chem in the United States for alleged theft of trade secrets. SK Innovation has denied the allegations.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.