SK On’s U.S. Battery Plant Hits Full Operation After 3 Years — A Turning Point Toward Profitability?

[Korea Financial Times, Kim JaeHun] SK On’s North American plant, SK Battery America (SKBA), has reached full operation three years after its establishment, raising expectations for a turnaround in performance.

According to SK On on the 15th, all 12 production lines at the SKBA North American plant are now running at full capacity. This milestone comes as Hyundai Motor Group’s electric vehicle hub, the Metaplant in Georgia, began full-scale operations in March.

The Metaplant is producing key electric vehicles, including the Hyundai Motor IONIQ 5 and IONIQ 9. SKBA exclusively supplies batteries for the IONIQ 5 and IONIQ 9. In addition, SKBA batteries are also used in Kia’s EV6 and EV9 models manufactured at the Georgia plant. Notably, the 110.3kWh batteries supplied by SKBA for the IONIQ 9 and EV9 are high-capacity and high value-added products.

With the ramp-up in U.S. battery supply, expectations are rising for an improvement in SK On’s performance. SK On recorded an operating loss of KRW 299.3 billion in the first quarter of this year. Securities industry forecasts project that SK On’s second-quarter operating loss will improve by 88% quarter-on-quarter to around KRW 35.6 billion.

In addition, increased battery production is expected to lead to greater production subsidy benefits from the U.S. government. Under the Advanced Manufacturing Production Credit (AMPC) provision of the U.S. Inflation Reduction Act (IRA), battery cells are eligible for a tax credit of USD 35 per 1kWh, and modules USD 45 per 1kWh. According to KB Securities, SK On’s AMPC subsidy for the second quarter is projected to reach a record-high KRW 241.3 billion.

Kim JaeHun (rlqm93@fntimes.com)