SK Innovation is doubling its battery production for electric vehicles to 4GWh/year to support demand from Mercedes and others

Korea-based SK Innovation announced today that it will expand its battery production capacity for electric vehicles. The company’s battery division manufactures the battery cells for the Kia Soul EV, some electric vehicles made in China, and it won a contract to supply batteries for Mercedes’ vehicles last year.

Encouraged by a strong backlog that the company claims will last 5 years, they announced two new production lines to increase their capacity to almost 4 GWh per year by the end of 2018.

SK Innovation’s current annual capacity at its Seosan factory in South Korea is 1.9 GWh

The two new lines announced today will add 1 GWh each for a total of 3.9 GWh. The company provided the expected timeline to the Korea Herald:

“The construction of the two production lines in Seosan, some 150 kilometers south of Seoul, will be completed by the first half of next year, with their operation starting before the end of next year.”

The timing makes it look like the capacity will be ready for Mercedes’ big entry on the EV scene with its new ‘EQ’ brand. Last year, Daimler green-lighted 4 new long-range electric vehicles for production by the end of the decade.

The first of the series will be the Generation EQ, an all-electric SUV with ~250 miles range. The vehicle is expected to hit the market in 2018-2019. Daimler expects to deliver large volumes of electric vehicles and recently announced the conversion of engine production assets to electric at its largest factory.

Other automakers working with SK are expected to expand their lineup of electric vehicles soon, like Kia. Thanks to SK, the Kia Soul EV has the most energy dense battery pack available today with 30 kWh of energy capacity in only a 400-lb pack.

Kia is now expected to launch new electric vehicles in the coming years, including a PHEV version of the Niro and potentially even an all-electric version.

While 4 GWh is nowhere near the planned capacity of companies like Tesla with the Gigafactory (35 GWh in 2018) or CATL (50 GWh in 2020), it always a good sign for electric vehicles when battery suppliers are investing in more capacity.