SEOUL, Jan 29 (Reuters) – South Korea’s SK Innovation Co Ltd , which owns the country’s top oil refiner SK Energy, said on Friday it will invest 1.3 trillion won ($1.16 billion) to build its third battery plant in Hungary.
The South Korean battery maker, which supplies electric car batteries to Volkswagen, Ford Motor Co and Hyundai Motor Co among others, will begin construction in the third quarter of this year, the company said in a statement.
The plant will have an annual capacity of 30 gigawatt-hours of batteries. The company’s first battery plant in Hungary has an annual capacity of 7.5 gigawatt-hours of batteries and began commercial production in the first quarter last year.
The third Hungary plant is a long-term project, which requires a total investment of about 2.6 trillion won up to 2028, SK Innovation said, adding that it plans to raise additional funds through external financing if needed.
Earlier on Friday, SK Innovation said in a regulatory filing that its third Hungary battery plant will target commercial production in early 2024.
The investment comes as global automakers’ shift to electric vehicles (EV) to comply with environmental regulations, leading to increasing demand for EV batteries.
SK Innovation, which has battery production sites in the United States, Hungary, China and South Korea, currently has an annual capacity of about 40 gigawatt-hours of batteries, aiming to ramp up its annual capacity of about 125 gigawatt-hours of batteries in 2025.
$1 = 1,117.8000 won Reporting by Heekyong Yang and Joyce Lee; editing by Richard Pullin and Jane Merriman