Company making batteries for Volkswagen Chattanooga expands again

Staff file photo / Volkswagen Chattanooga Chief Executive Officer Tom du Plessis, Tennessee Gov. Bill Lee and Volkswagen Senior Executive Vice President of Public Affairs David Geanacopoulos sign shovels at the groundbreaking event for the VW electric vehicle facility last November.

South Korean battery maker SK Innovation, which is slated to supply Volkswagen Chattanooga's electric vehicle assembly site, says it plans to plow another $940 million into a Northeast Georgia facility.

The latest investment will create another 600 jobs in Commerce, Georgia, according to Georgia Gov. Brian Kemp. The money is in addition to the $1.67 billion the company earlier announced it plans to spend to develop two manufacturing facilities along with creating 2,000 jobs.

"Georgia is cementing its place as the Southeastern U.S. hub for the electric battery and vehicle market in large part thanks to SK innovation, and it is exciting to see the growth in demand for these quality products," Kemp said.

Amanda Plecas, head of communications for VW in Chattanooga, said SK Innovation will supply lithium-ion battery cells for the automaker's planned electric SUV in 2022.

She said VW's Chattanooga EV plant, on which work started late last year, "has a commitment to create new jobs and use local suppliers."

Even though production in Volkswagen's existing plant shut down for a time earlier this spring due to the coronavirus, work kept going on the $800 million electric vehicle manufacturing site.

That work includes a 564,000-square-foot addition to the body shop where Volkswagen will build both internal combustion engine vehicles and EVs on the same assembly line.

Also, the company plans to build a 198,000-square-foot facility adjacent to its factory for the assembly of battery packs to install in its planned SUV.

In March 2019, SK innovation broke ground on its first manufacturing plant in Jackson County, about 65 miles northeast of Atlanta.

The state and Jackson County combined offered SK Innovation about $300 million in grants, tax breaks and free land as incentives, according to The Atlanta Journal-Constitution.

The company will break ground on the second facility in July, according to the state.

Due to increased interest in its electric vehicle batteries, SK Innovation is expanding upon the original project and investing the additional money to build a new 430,000-square-foot plant at the Commerce business park.

"SK Innovation's solid partnership with Georgia will allow SK to continue investing in Georgia, the U.S. economy, and the U.S. electric vehicle industry," said SK Innovation CEO Jun Kim.

SK Innovation is a part of the SK Group, one of the largest conglomerates in South Korea. The company employs more than 6,500 people worldwide, and customers for SK Innovation's battery business include Volkswagen, Mercedes-Benz, Hyundai-Kia Motors, and Ford Motor Co.

In February, the U.S. International Trade Commission gave a preliminary ruling that SK Innovation had misappropriated trade secrets from crosstown rival LG Chem. The default judgment by the ITC could potentially mean SK Innovation cannot import some battery products it may need to supply Volkswagen, according to a Reuters news report.

The Korea Times reported that the trade court sided with LG Chem in its claim that SK Innovation attempted to destroy a wide range of evidence indicating that it stole confidential battery-making trade secrets.

The newspaper said that SK Innovation is trying to avoid an embargo on its EV battery products in the U.S. through reconciliation with LG Chem involving financial compensation. The ITC is set to make a final ruling in the case on Oct. 5, according to LG Chem.

Contact Mike Pare at Follow him on Twitter @MikePareTFP.