SK Innovation wants to increase investment in US battery factory by $5 billion to compete with Tesla Gigafactory

SK Innovation already announced an important investment in a battery factory in the US, but it’s now considering increasing that investment — maybe even enough to compete with Tesla’s Gigafactory 1 in Nevada.

Last month, the South Korean battery manufacturer announced a new $1.67 billion investment to build an electric vehicle (EV) battery gigafactory near Atlanta, Georgia.

It’s the biggest investment in battery cell manufacturing in the US since Tesla and Panasonic launching their effort to build Gigafactory 1.

That said, Tesla Gigafactory 1 still dwarf the project in capacity.

SK Innovation was planning for an annual production capacity of about 10 GWh at the factory.

Now the company is considering to ramp up its investment in a significant way – maybe even enough to compete with Tesla and Panasonic.

Automotive News reports:

“The company is considering plowing up to $5 billion more into the project, SK Innovation CEO Jun Kim said Friday.”

When first announcing the project, SK Innovation said that some of its customers, namely Mercedes-Benz and Hyundai-Kia Motors, are going to need battery cells in the US and therefore, it is investing in local battery cell production.

Not long after first announcing the plan, Daimler said it was buying over $20 billion in battery cells to support electric vehicle plans and that SK Innovation is amongst the suppliers.

It’s unclear if new EV production plans from partners have prompted SK Innovation to consider increasing its investment in the US battery factory project.

Aside from Tesla’s Gigafactory 1 in Nevada, most of the new battery cell manufacturing capacity is going to Asia and Europe, where automakers are more aggressively electrifying their lineups.

Now SK Innovation’s project is the latest exception and it could be one in a big way if it goes forward with the new investment plan.

In the meantime, it is also expanding production in other regions.

Last year, SK Innovation said that it is doubling its battery production for electric vehicles to 4GWh per year at its South Korean factories to support demand from Mercedes and others.

The company is also building another electric car battery gigafactory in Hungary to support European automakers.