Break even expected in 2021

SK Innovation has bold investment plans in new lithium-ion cell production capacity around the world. The output is set to increase from 5 GWh annually today, to 20 GWh annually by the end of 2019, to 40 GWh annually in 2020 and 100 GWh annually by 2025.

As the volume will increase, SK Innovation expects to break even in 2021.

The most important element of the strategy is a new plant in Georgia, U.S., which will be producing cells for Volkswagen and probably also other manufacturers.

Cost of the new plant is to be $1.67 billion, but it could increase to $5 billion as the output will increase to 50 GWh annually in 2025.

Another facility in Hungary will have an output of 7.5 GWh per year.

According to Bloomberg, commissioned, under construction and announced cell manufacturing capacity is:

  • CATL - 148 GWh
  • Tesla/Panasonic - over 100 GWh
  • LG Chem-  roughly 75 GWh
  • BYD - over 60 GWh
  • SK Innovation - about 60 GWh
The South Korean company hints at external financing for the investment, through selling a minority stake in plants, but maintaining majority control.

"To fund that growth, Kim said SK Innovation is weighing a number of scenarios, including additional bank financing. “Over the long term, the options could be a spin-off or inviting other strategic investors,” he said, adding that SK Innovation would maintain majority control."

In the case of technology, SK Innovation aims in high energy dense NCM 811 lithium-ion cells for more than 500 km (300 miles) of range.

Source: Bloomberg