South Korea's top-3 battery makers SK On, LG Energy Solution (LGES), and Samsung SDI are all on track to build additional domestic production capacities, in order to reduce the country's reliance on Europe, the US, and China for power battery supply and help expand its EV market, according to reports from Korea news media.
Ddaily and Korea Economic Daily reported SK On is preparing to set up new production lines at its existing manufacturing plant in Seosan while also strengthening its new-generation battery R&D efforts. LGES and Samsung SDI have also disclosed plans to carry out capacity expansions at their existing production bases in Ochang and Cheonan, respectively, by setting up new-generation cylindrical battery production lines, the reports continued.
At the moment, the annual capacity at SK On's Seosan plant is 5GWh, and its new investment plan will boost the capacity 3 to 4 times. The company is reportedly discussing investment details with its cooperative partners, and will start ordering relevant equipment after settling the details.
Industry analyst said SK On's ongoing round of investment is mainly to meet future battery demand from Hyundai Motor. The automaker is set to start in 2024 official production of Ioniq7 electric SUVs at its Asan plant in South Korea, and its new domestic EV plant in Ulsan is also slated for completion in 2025.
In addition, SK On has also announced that it will invest KRW 470 billion (US$351 million) in the Daejeon Battery Institute by 2025 to expand research facilities and build a next-generation battery pilot plant. The company aims to develop an all-solid-state battery prototype in the second half of 2024 and start its commercialization in 2028.
LGES has also announced plans to invest KRW 4.0 trillion by 2026 in infrastructure construction and new battery production lines at its manufacturing complex in the Ochang Industrial Park. If the company can smoothly builds new production capacity for 21700 and 46800 cylindrical batteries, industry sources said, its annual output at the complex will sharply rise to 33GWh in 2026 from the current level of 9GWh.
Chosun Biz also reported that LGES will invest KRW 600 billion to set up a "Mother Line" at its second energy plant in Ochang by the end of 2024, which will initially produce long-cell battery pouches. Unlike general trial production lines, the Mother Line can also verify mass production and apply next-generation design and process technologies, in addition to handling simple product tests.
As to Samsung SDI, it is also preparing a 46mm diameter cylindrical battery pilot line at its Cheonan plant in South Korea. It is reported that the company will set up a formal production line after rolling out relevant samples, but is has yet to disclose the specific production capacity and schedule planning.
Korean industry observers analyzed that from the perspective of longer-term development, the domestic capacity expansions to be carried out by the three major battery suppliers will not only benefit local battery materials, components, and equipment industries, but will also make South Korea become an attractive location for overseas automakers to set up EV plants, generating significant growth momentum to the country's EV industry and market.
Article translated by Willis Ke
