SK Innovation to build its own electric car battery gigafactory in Hungary

Korean energy company SK Innovation announced today that they will build a gigafactory to manufacture electric car battery cells in Hungary in order to support the electric vehicle plans of European automakers. 

‘Gigafactory’ is a term coined by Tesla CEO Elon Musk to describe a factory capable of producing energy products calculated in gigawatt-hour.

It would apply to this new plant since SK Innovation is planning for a capacity of 7.5 GWh per year (via Reuters) – making it one of the biggest battery factory in the world.

The new factory would have more than twice the capacity of the company’s main battery cell factory in Korea, which was producing 1.9 GWh of batteries for vehicles like the Kia Soul EV and other low volume EV.

Earlier this year, they announced an increase of capacity at their Korean plant to 3.9 GWh with two new production lines and now they are adding this new 7.5 GWh plant in Hungary.

The company said that they plan to break ground in February 2018 and start production in early 2020. It would bring their total production capacity to close to 12 GWh at that point.

While it’s still nowhere near the planned capacity of companies like Tesla with Gigafactory 1 in Nevada (35 GWh in 2018 and 105 GWh in 2020) or CATL in China (50 GWh in 2020), it still some significant capacity that should support the volume production of a few electric vehicles.

The news comes after SK Innovation won a contract to supply batteries for Mercedes’ vehicles last year. The German automaker’s EV programs should act as the main consumers of the new plant’s capacity in Hungary.

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 Mercedes EQC, an all-electric SUV with ~250 miles range. The vehicle is expected to hit the market in 2018-2019 and therefore, it will require cells from another plant, but Mercedes’ EV volume should come later with more vehicle programs in time for the new Hungarian battery factory.