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SK On Reconsiders $3.2B Turkey Plant Amid EV Market Shifts

Photo by Dima Rogachevskiy / Unsplash

Seoul, South Korea—SK On, a South Korean battery manufacturer, is contemplating abandoning its plans for a $3.2 billion plant in Turkey, according to sources familiar with the matter. 

The decision was made in the context of an increase in interest rates and a deceleration in the European electric vehicle (EV) market.

In March 2022, SK On entered into a memorandum of understanding with Ford Motor and Koç Holding to invest in a battery factory. 

The plant was designed to produce between 30 and 45 gigawatt-hours (GWh) annually, and production is scheduled to commence in 2025.

The project has encountered delays due to financial constraints resulting from elevated interest rates and declining demand for electric vehicles in Europe. 

Industry analysts have identified two factors contributing to the decline in demand: increased electricity costs and the ongoing conflict in Ukraine.

According to sources, SK On is now directing its attention to the U.S. market, where demand for EVs is projected to grow due to government initiatives supporting the domestic green vehicle industry.

The company has recently initiated the construction of two battery plants in Kentucky as part of a joint venture with Ford.

SK On, a wholly-owned subsidiary of SK Innovation, is currently the fifth-largest manufacturer of electric vehicle batteries globally. 

The company operates battery plants in the United States, Hungary, China, and South Korea.