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SK Innovation builds Europe’s largest EV battery plant in Hungary

Korea’s SK Innovation already operates a 7.5 gigawatts-hour (GWh) factory in the Hungarian town of Komárom and is building the second one at the site. The announced third plant will be bigger than the previous two combined, with an annual production capacity of 30 GWh. The investment will amount to 2.3 billion US dollars (1.9 billion euros), the largest greenfield investment in the history of Hungary, which confirms Hungary’s dedication to becoming a major player in the European battery ecosystem.

SK Innovation’s first two overseas plants are located in Komárom and now the third European plant will be built in Iváncsa. The construction should start in the third quarter of this year, while the start of production is scheduled for early 2024. The plant should be fully completed by 2028. The Hungarian government will provide significant financial support for the construction of the new battery plant. Although the exact numbers are not finalised yet, it will probably be the largest one-off support in the history of Hungarian investment promotion.

“This new plant with an annual production capacity of 30 GWh will be the largest EV battery plant in whole Europe,” said Jun Kim, CEO & President of SK Innovation.

The South Korean company’s decision was motivated by the fact that the demand for electric cars in Europe expands significantly. Data suggest that Europe is currently the fastest-growing e-mobility market in the world and it is likely to see strong growth partly due to the increased subsidies and incentives introduced in the framework of green recovery.

Despite the recession triggered by the coronavirus pandemic that has caused the overall car market to shrink the market share for EVs has risen. For instance, German automaker Volkswagen tripled sales of battery-only cars in 2020 to 134,000, up from 45,000 in 2019.

The rapidly expanding EV market of Europe also means increased demand for battery cells which represent approximately 40 per cent of the value-added in the production of an electric vehicle.

With this new investment, Hungary is well-positioned to take a leading role in European battery production. In recent years Asian suppliers have expanded their battery factories significantly in Hungary. Last year, Samsung SDI has also started to expand its battery plant in Hungary.

Hungary is also working on its National Battery Strategy that will be completed at the beginning of 2021 according to plans. The objective is to enable Hungary, together with local and international industry partners, authorities, the academic and financial sectors to become an integral part of the European supply chain and the European Battery Alliance (EBA).

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