Georgia’s biggest-ever foreign investment could be poised to grow even larger.
SK Innovation, the Korean oil refiner pivoting into electric vehicle batteries, has announced that it will build a second factory on its site in Jackson County and increase its capital investment to $2.5 billion by the time they’re both operational in 2023.
The company, which broke ground on the first facility in March 2019, had always planned to build in multiple phases in the city of Commerce, with two plants of 1 million square feet apiece set to create a combined 2,000 jobs.
But the planned spending initially was pegged at $1.67 billion, which already dwarfed any other single foreign investment project in the state’s history, even the Kia Motors plant — another Korean investment — that came to West Point more than a decade ago.
Reports from Reuters and other news outlets Wednesday said the company would invest an additional $727 million on top of $903 million spent on the plant so far, putting its cumulative expenditure close to the budget announced originally.
But a news release by SK innovation Thursday clarified the figures, saying its board of directors had approved plans to spend some $2.5 billion overall.
The investment is aimed at preparing for long-term growth in electric vehicles, despite the current one-two punch to demand from drastically reduced oil prices and the coronavirus-induced economic slump.
The first plant, which will be online in 2022, was expected to have 9.8GWh capacity and was reportedly aimed at supplying the EV models set to be produced just across the state line at the Volkswagen plant in Chattanooga, Tenn., where the German auto maker is spending $800 million to prepare for new electric models.
The second SK battery factory will more than double the company’s output in Georgia to 21.5 GWh. The two plants here would represent about 30 percent of SK’s planned 71GWh capacity globally (including plants in Hungary and Korea).
“While the global community faces challenging times, SK Innovation believes it is important to continue making strategic investments to drive economic growth and meaningful change,” SK Innovation CEO Jun Kim, who visited Georgia last March, said in the news release. “With this investment, SK Innovation’s battery business will significantly contribute to not only the local Georgia economy but the development of the U.S. EV industry value chain and ecosystem.”
Sources had shared with Global Atlanta that a second plant may be in the works, though the rumors weren’t able to be independently confirmed.
What was indisputably clear already was that SK’s plant (much like Kia) was already spurring ancillary investment by related suppliers. Gov. Brian Kemp traveled to Korea last June, and then to Germany in January. It was on the latter trip that he announced EnChem would invest $61 million in two factories in Jefferson to make electrolytes for SK’s batteries.
It’s unclear whether the new capital will generate additional jobs. A spokesperson said the Georgia Department of Economic Development does not comment on “active projects.”
The company said it could eventually invest up to $5 billion in the U.S. and create 6,000 jobs, but not all of that need come to Georgia.
That SK will meet its projections is also not a given: The Reuters report as well as earlier reports from the Atlanta Journal-Constitution noted that SK Innovation is currently embroiled in a legal battle with Korean rival LG Chem in the U.S. that “could stop SK Innovation from importing EV batteries and components.”