EU approves subsidy for SK Innovation's Hungary battery plant, but extends probe into Samsung aid

by Margaret Lau
Samsung SDI president Jun Young-hyun (left) with Hungary's prime minister Viktor Orban (centre) at its EV battery plant in 2017. Photo: Samsung
The European Commission has approved a proposed €90m (£78m) subsidy by Hungary for construction of a battery plant in the country by South Korea’s SK Innovation – but has extended a probe into a planned €108m of Hungarian support for a similar project by Samsung SDI.

The Commission said the subsidy for SKI to build its second electric vehicle battery cells plant, north of Budapest, in Komárom, would boost regional development and "clearly outweigh any distortion of competition brought about by the state aid”. The ruling followed a 10-month state-aid probe.

However, the Commission said it was extending its investigation into whether the proposed aid for South Korea's Samsung – to expand its battery cell production facility, in Göd, near Budapest – is justified under EU state-aid rules.

"New documentary evidence disclosed by Hungary shows that the location search for the investment project by Samsung had included a number of greenfield investment sites in Europe and, in particular, an alternative location in a less-developed region in the EU,” the Commission said.

'Green loan'

World Battery News reported last month that SKI had secured a $500m (about £360m) ‘green loan’ from the Export-Import Bank of Korea towards construction of its second Hungarian EV battery plant.

The 9.8 GWh plant is one of two lithium-ion battery production plants under construction in the country by the company’s SK Battery Manufacturing subsidiary.

Meanwhile, SKI is set to start building a third battery plant in Hungary, at Iváncsa, in the third quarter of this year.

Samsung overhauled its existing electronics plant at Göd to relaunch it as a battery plant in 2016. Initially, Samsung said the facility was capable of producing batteries for 50,000 EVs annually.

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