(Bloomberg) -- South Korea-based SK Innovation is planning to build Europe’s largest battery plant in Hungary in what officials said was the biggest greenfield investment in the eastern European Union member’s history.
SK Innovation will invest $2.3 billion in what will be its third battery plant in Hungary, Foreign Minister Peter Szijjarto said at a briefing on Friday. Construction will be completed in 2028, SK Innovation said in a statement. It said financing will be secured “externally according to its construction schedule.”
Hungary has aggressively courted battery makers with major state subsidies in a bid to preempt any negative impact from the electric revolution that’s sweeping the car industry, a crucial sector underpinning the country’s economy and also that of the wider region.
Daimler AG’s Mercedes, Volkswagen AG’s Audi and Suzuki Corp are among car manufacturers in Hungary, with BMW AG in the process of building its own factory.
“Hungary has become Europe’s leader in electric battery production,” Szijjarto said. “Without any exaggeration we can say Hungary has entered into the new era of the car industry because the world’s biggest battery plants are being built here.”
Major Subsidy
Hungary plans to provide the biggest investment subsidy in its history, Szijjarto said, adding that the government would make the size of the aid public once the agreement was signed with SK Innovation and the process of notification with the EU has been completed.
Samsung SDI, another South Korean company, announced in 2017 that it would invest 1.2 billion euros ($1.5 billion) to expand its lithium-ion cells and battery plant in Hungary. The EU executive in 2019 announced a probe into the 108 million-euro subsidy Hungary extended to the project.
SK Innovation’s new plant, to be located in Ivancsa, 50 kilometers (31 miles) southwest of Budapest, will have a production capacity of 30 GwH per year, according to the company. The factory will employ 2,500 workers.
“Thanks to this investment, the company will be able to pro-actively cope with the battery demands in the European markets, which are expected to increase more than six times to 256 GWh in 2025 from the current 41 GWh,” SK Innovation said.
©2021 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR