SKI European Battery Subsidiary Turns Loss to Profit

SKI recently announced a performance report showing that the sales of its Hungarian battery subsidiary SKBatteryHungary (SKBH) in 2020 increased from 1.7 billion won in 2019 to 357.2 billion won (approximately RMB 2.09 billion), an increase of 210 times; operating profit reached 690 million won, compared with the loss of 19.5 billion won a year ago, it has turned losses into profits. SKI said that the main reason for SKBH's turnaround is that its first battery factory in Komárom, northern Hungary, has started stable mass production in 2020, and its shipments have steadily increased. Statistics from the Advanced Industry Research Institute (GGII) show that SKI will have 4.34GWh of global installed electricity in 2020, an increase of 184% year-on-year, with a global market share of 3.2%. The global ranking has risen from 10th to 6th, with Kia, Hyundai, Volkswagen, etc. The main engine factory supplies the battery installation package. With the further increase in the sales of electric vehicles in Europe and the increase in the output of battery factories in the later period, SKI's European battery factory shipments are expected to further increase. Under such circumstances, SKI also places high expectations on its European battery business and increases investment Further expand the output of the plant. In early 2021, SKI announced an investment of 1.27 trillion won (approximately RMB 7.3 billion) in its Hungarian subsidiary SKBH, and plans to build its third battery plant near Budapest, Hungary, with an estimated annual output of 30GWh. The third plant is scheduled to break ground in the third quarter of 2021, with a total investment of approximately 2.6 trillion won (approximately 15 billion yuan) by 2028. The new plant is close to the Ford and Mercedes-Benz plants. SKI's purpose may be to provide nearby supporting services to its major customers. At present, the first battery plant built by SKI in Komárom, Hungary has been put into production, with an annual output of 7.5GWh, and the second battery plant is still under construction, with an annual output of 9.8GWh. After the third plant is completed and put into production, SKI's battery output in Europe will reach more than 45GWh. It is worth noting that although SKI's European battery business is showing an upward trend, its power lithium battery business as a whole is still at a substantial loss. At the same time, SKI was ruled by the United States ITC to steal LG Energy’s trade secrets and was prohibited from selling batteries, modules, and battery packs in the United States for the next 10 years. Under this circumstance, SKI's power lithium battery business will face greater pressure and challenges in 2021.