Korean EV Battery Maker Set to Invest Nearly $2B In US

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SK Innovation

SK Innovation

SK Innovation, the battery division of the Korean company SK Group, is set to invest nearly $2 billion in Georgia. The corporation unveiled plans to build and staff a lithium-ion battery factory 65 miles northeast of downtown Atlanta, joining Kia Motors as manufacturers located in Georgia, a strategic location relative to major southeastern distribution centers.

SK Innovation President and CEO Jun Kim sat down for an hour-long interview with Scott Trubey of the Atlanta Journal-Constitution to discuss the project. You can read the full transcript by clicking here.

Much of the discussion centered around the investment being made to the area, the jobs it will create, and how SK Innovation believes that it can help the growth of auto manufacturing in the United States.

Here are several direct quotes from the conversation.

AJC: Why did you decide you need to be in the United States and what does this factory mean for the business?

Kim: “That’s a simple question to answer, I think. The reason we decided to build a factory in the United States is because of the demand and ... because one of the vendor requirements (of automakers in the U.S.) is to get a stable supply (of components) from local manufacturers, local suppliers.”

AJC: How would you describe the potential for that demand?

Kim: “It’s difficult to give a definite number and forecast that. But so far, the EV market has been growing much more rapidly than expected and I think this trend of rapid growth or more rapid growth than projected will continue in the future.

“…First of all, I can say the existing driver for the EV market has been environmental regulations of different countries. However, starting from the second half of 2017 or the first half of 2018 the (automakers) started very aggressively ordering EV batteries.

“Volkswagen and other global (automakers) coincided their global rolling out of EV-dedicated platforms with increasing the volumes of the orders for EV batteries. In the past they were building electric cars in response to regulatory requirements. However, I think this switch in their actions had to do with their convictions for quicker than expected commercialization and deeper penetration of e-mobility.

“The core concept of e-mobility is often summed up in four letters – CASE.

“Connectivity. Autonomous. Sharing. And lastly, E stands for electrification. Without electrification, all of these three technologies cannot be properly converged.

“The impression I get when I go to different motor shows and even big industrial exhibitions like (the Consumer Electronics Show) is the concept of future cars, that used to be a bit more distant in the past, feels much more closer and closer to reality on the merits of electric vehicles. …In the past, internal combustion vehicles used to be a mere means of transportation, but in the future, electric cars will be a deliverer of a completely different lifestyle. Simply, we’re going to live in a world where we don’t need to put our hands on the wheel.”

AJC: The demands on batteries from electrification and moving the vehicle from Point A to Point B becomes even more intense, particularly with autonomous vehicles. It’ll power your electronic devices while you work or watch a movie. That puts more burden on the batteries you’re building.

Kim: “Exactly. That’s why the different (automakers) see a massive potential and business opportunities around the electric car in the future and (automakers) are now at a juncture where they cannot not choose that path. The potential is so immense.

“One of the key strengths of the U.S. market in the potential of the EV is found in Silicon Valley. Silicon Valley is leading the whole advancement of the core technologies and all different related business models. That’s where these ideas are developed ahead of others and are tested.

“That’s is why I think the conversion from internal combustion or IC to EV in a greater scale is going to come quite earlier than expected in the United States.

“Especially when this trend is combined with the ability of battery makers to supply and fulfill the large-scale orders for the global (automakers). I think in 2022 or 2023 at latest, the production costs of the EV will be actually lower or at least overtake the production costs of (internal combustion vehicles).

“Of course, on top of that, what’s already happening is the total operating cost and maintenance of EVs is already cheaper than IC vehicles, but what I’m saying is the total production costs for EVs is going to become cheaper without (government) subsidies.”

You can read the full transcript by clicking here.