SK on Co., the electric vehicle (EV) battery subsidiary of South Korea’s SK innovation Co., will invest 1.5 trillion won ($1.1 billion) to expand its plant in Seosan, South Chungcheong Province.

SK on signed a memorandum of understanding with South Chungcheong Province and Seosan City on Wednesday to expand its third facility in Seosan.

The signing ceremony was attended by SK on Chief Executive Officer Jee Dong-seob, South Chungcheong Province Governor Kim Tae-heum, Seosan Mayor Lee Wan-seop, and other officials, the company said in a release.

Under the agreement, SK on will expand its third plant covering 44,125 square meters within the Seosan Auto Valley complex in Seosan City. The total investment is 1.5 trillion won, marking its largest domestic investment.

South Chungcheong Province and Seosan City will provide administrative and financial support, including licensing.

The expansion of the third factory will be completed by 2025 and will have a capacity of 14 gigawatt-hours (GWh) by the end of 2028 through equipment replacement and process improvement work, the company said.

SK on’s total domestic annual production capacity will reach about 20 GWh, which is enough to power around 280,000 electric vehicles annually. This marks a significant investment plan that will increase its total production capacity by more than 100 times in just 11 years since the company began its first production in Seosan in 2012.

Starting with the establishment of a 200 megawatt-hour (0.2 GWh) production line at the Seosan Factory 1 in 2012, SK on has gradually expanded its production capacity to 5 GWh by 2018.

The latest investment is expected to contribute to boosting the local economy by creating new jobs.

SK on’s Seosan plant has become a crucial facility for building the know-how needed to establish a global battery production base and nurture battery-specialized workforce.

Since its active global market expansion in 2018, SK on has established a total global production capacity of 89 GWh in the U.S., Europe, and Asia in just five years.

SK on plans to implement a smart factory and optimize its operations by introducing cutting-edge equipment at the third factory. With a production speed increase of over 30 percent compared to existing lines, it is expected to greatly enhance process accuracy and efficiency.

By Seo Jin-woo and Yoon Yeon-hae

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