SEOUL -- SK Innovation will spend 1.27 trillion won ($1.14 billion) to build its third automotive battery factory in Hungary as the South Korean company readies capacity on three continents to supply power sources for the fast-growing electric vehicle market.
The third factory is slated to come online in 2024 after a second Hungarian site opens in 2022. Another plant in the U.S. state of Georgia is expected to start operating next year. Other facilities are in China and South Korea.
Bracing for falling demand in its mainstay oil-refining business, the SK group member seeks to make its battery business -- which now generates less than 10% of consolidated sales -- into a reliable earnings source.
The new plant openings will increase SK Innovation's battery production capacity to 125 gigawatt-hours in 2025 from about 20 gigawatt-hours at present. That represents an upgrade from the 100 gigawatt-hour target for 2025 before the announcement of the third Hungarian facility.
SK Innovation supplies batteries to Hyundai Motor and Daimler. The customer list is expected to include Ford Motor and Volkswagen after the American plant opens.