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      SK Innovation to Supply Electric Vehicle Batteries to BAIC

      Apr 21, 2020

      SK Innovation is planning to supply electric vehicle batteries to China’s BAIC Group. As it looks to actively target the Chinese market, which is the world’s biggest market for electric vehicle, it has prepared a turning point to increase its market shares within the global electric vehicle market separated from its lawsuit with LG Chem regarding infringement of trade secrets.
      According to the industry, SK Innovation is planning to supply its batteries to BAIC for BAIC’s premium electric vehicle brand called ARCFOX’s SUV called “Mark 5”. BAIC is a state-owned enterprise and it is the third biggest electric vehicle seller after Tesla and BYD.
      SK Innovation’s battery (NCM811) has nickel, cobalt, and manganese ratios of 80%, 10%, and 10% respectively. It has applied its own technology so that the battery has high level of stability despite the high percentage of nickel.
      This battery will be produced from its battery plant in Changzhou called “BEST” that was constructed jointly with BAIC and BEHC at the end of last year. BEST is SK Innovation’s first global battery production plant.
      SK Innovation has not officially announced the timing of the operation of BEST. However, it is likely that SK Innovation will start mass-producing batteries on full-scale starting from this month. Because the release date of Mark 5 is set to be in the second half of this year, it has to start mass-producing batteries early in order to meet the initial supply of Mark 5.
      The exact amount of supply of batteries is also not clear. Because BEST is able to produce 7.5GWh worth of batteries annually, which are equivalent to 150,000 electric vehicles based on 50kWh battery, it is expected that the amount of this contract will take up significant portion of the production of BEST.

      SK Innovation’s first global battery cell plant “BEST” constructed in Changzhou (Reference: SK Innovation) <SK Innovation’s first global battery cell plant “BEST” constructed in Changzhou (Reference: SK Innovation)>

      With this contract, SK Innovation has prepared an opportunity for a rebound. In February, it received an initial determination that it lost a case against LG Chem regarding electric vehicle battery that was presented by LG Chem to ITC (International Trade Commission). If this result stands, SK Innovation will not be able to import battery cell, module, pack, and relevant parts and materials from the U.S. It will also have to stop the operation of its battery plant in Georgia in which SK Innovation invested $1.6 billion in order to stop producing batteries in 2022.
      This contract is a positive factor that can offset the possible loss it may face based on the outcome of the case. China leads the global electric vehicle market and it also has the most demands for electric vehicle battery. SK Innovation is expected to establish a solid standing within the Chinese market in the future. It has a special partnership with BAIC as it established a joint battery venture called “BESK” in 2013 with BAIC that holds the entire shares of BEST. This indicates that there is a high chance that SK Innovation will obtain additional orders from BAIC in the future.
      Also, it established a joint venture with EVE Energy in last September and they are going to construct a battery plant in Yancheng. Fact that a battery plant is usually goes into construction after a contract is made indicates that SK Innovation has already secured demands.
      “Batteries that are produced from BEST will be supplied to BAIC and other electric vehicle manufacturers that have their factories in Changzhou.” said a representative for SK Innovation. “We are going to give even more spurs to our plan to target the global battery market.”
      Staff Reporter Ryu, Taewoong | bigheroryu@etnews.com

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