SK Innovation’s Seosan mid- to large-sized battery factory sales have more than doubled year-on-year. This is the result of facility capacity expansion being implemented twice in the past year. ‘Quantum jump (rapid growth)’ is likely when the Chinese and Hungary battery factories start full operation next year.
According to the SK Innovation business report on the 4th, the Seosan factory’s sales amounted to 331.6 billion won, about 2.5 times of 2016's 136.6 billion won. The utilization rate recorded to be 85.9%. The Seosan plant produces mid- to large-sized batteries for electric vehicles (EVs).
The aggressive capacity expansion in 2018 occuring twice made the sales growth possible. SK Innovation completed the expansion of the 4th, 5th, and 6th production lines of the 2nd Seosan Factory in the first quarter of last year. This happened in only one and a half years after the expansion of the 3rd production line. The annual production capacity has increased from 1.1 GWh to 3.9 GWh. The 7th production line expansion was completed in August, increasing the production capacity to 4.7GWh.
The company is also constructing the 1st plant (7.5GWh) in Komarom, Hungary, and the 7.5GWh plant in Changzhou, China, following the Seosan plant (4.7GWh). The construction is scheduled to be completed by the fourth quarter of next year. Full-scale mass production will start in 2020. The company will be able to secure 20GWh production capacity. Calculated based on the case of the Seosan plant, the sales per 1GWh is 54.1 billion won. SK Innovation's 2020 EV battery business sales are expected to 1.82 won. When the second plant (10GWh) in Hungary and the Georgia (10GWh) plant in the US start mass production in 2022, the total production capacity will increase to 40GWh. Then, the sales become over 2.14 trillion won.
The industry is expecting SK Innovation to become profitable in its battery division from 2020. That moment will be the moment of achieving sales of 1 trillion won. Last year, the battery business was in red by 317.5 billion won. The deficit was 232.1 billion won in 2017. The cumulative deficit is estimated to be between 700~800 billion won considering the fact that the Seosan plant began mass production in 2012 and the capacity expansion started in earnest in 2016.
An industry official said, "Because the company is expanding factories based on the principle of ‘order first, facility expansion later,’ so there is little concern about the increase in deficit or over-investment."
The Seosan plant began mass production simultaneously with its completion in September 2012, a year and four months after the start of construction. As the news of battery supply contracts with Daimler and other global motor vehicle companies was released, the expansion of SK Innovation's battery business was also accelerated. The electric vehicle battery produced at the Seosan 2 plant is a third-generation EV battery with the mileage of 400 km or 60 km or more in the case of plug-in hybrid vehicles (PHEV).