SK Innovation turned over 1.61 trillion won, the equivalent of around 1.2 billion euros, with its battery business in 2020. Compared to 2019, sales more than doubled, but the battery business still left a bottom-line loss of 426.5 billion won (318 million euros) in 2020 – due to investments.
According to SK Innovation, the battery business is on a steep growth trajectory. According to the company, the aforementioned annual turnover represents a new record. It will probably not remain the last record: “as its factories at Yancheng and Huizhou in China with an additional 20GWh production are in full operation this year, bringing up the total capacity to 40Gwh, which is 4 times larger compared to capacity at the end of 2019,” SKI wrote.
The group cites one reason for the battery business not yet being profitable in connection with its financial figures for the fourth quarter of 2020, according to which the loss was due to overseas factories’ investment costs. Between October and December 2020, SKI recorded its highest quarterly revenue of 479.2 billion won (357 million euros) (By comparison, in Q4 2019, revenue was still 225 billion won), but made a 108.9 billion won loss (around 81.2 million euros) in the face of even higher expenses.
Along with the business figures, SKI provides an overview of its plants and expansion plans. Currently in operation outside South Korea are a plant in Hungary with 7.5 GWh of production capacity and, since last year, another in Changzhou in China. Besides, the two Chinese production facilities in Yancheng and Huizhou are scheduled to start mass production in the first quarter of 2021. In Georgia, two battery plants are under construction – the first with a capacity of 9.8 GWh is scheduled to come online in the first quarter of 2022 and the second plant with 11.7 GWh in the first quarter of 2023.
Two more sites are also planned for Hungary. While one with 9.8 GWh will join the existing plant in Komárom in the Hungarian-Slovakian border region, SKI announced that it was planning a third factory for Hungary a few days ago. In the annual review, the South Koreans now state that mass production at the second factory is to start in the first quarter of 2022 and that at the third factory in the first quarter of 2024.
This is interesting because when it was announced a few days ago, there was still talk of a completion date for the third factory in 2028. Apparently, the first construction phase is expected to be completed in early 2024. That fits the picture. With a planned production capacity of 30 GWh in the final expansion stage, the production facility in Iváncsa, 50 kilometres southwest of Budapest, will be considerably larger than the other two Hungarian plants.
In total, SK Innovation is aiming for an annual battery production capacity of 85 GWh by 2023 and 125 GWh by 2025. The company is thus revising its original planning, according to which 100 GWh were to be reached by 2025. However, part of the classification is that SK Innovation does not yet produce EV battery cells on the scale that Panasonic, LG Chem or CATL do.
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