SEOUL-- SK On, the new battery spinoff of SK Innovation Co., said it is investing US$2.53 billion to build a new production line for electric vehicle batteries in China, industry sources said Thursday.
SK On recently signed a contract with Yancheng city in China's northeastern Jiangsu Province to build its fourth factory in the world's largest auto market, according to the sources.
Of the amount, the company has already invested $1.06 billion.
SK On has three EV battery plants in China, -- Changzhou in Jiangsu Province, and Huizhou in the central Guangdong Province and Yancheng, -- with the combined annual production capacity of 27 gigawatt hours (GWh).
The fourth plant being built near SK On's plant in Yancheng will have annual production capacity of 10 GWh and be SK On's largest plant in China.
The Changzhou plant is being operated by a joint venture with Beijing Automobile Works Co. and the Huizhou factory jointly run by Chinese battery maker EVE Energy Co.
The new Yancheng plant will operate independently, a source said. The construction will start around the beginning of next year.
SK On established a joint venture with U.S. carmaker Ford Motor Co. in September and agreed to build three battery plants in the United States capable of a combined 129 GWh in annual production by 2027 in a joint deal valued at $8.9 billion. It also has a production facility in Hungary.
SK On aims to build up its global battery production capacity to over 500 GWh by 2030, from the current level of 40GWh.
Source: Yonhap News Agency