SK Innovation Co., chemical and battery unit of South Korean conglomerate SK, is building its first offshore electric vehicle (EV) battery factory in northern Hungary with nearly twice the capacity of its 3.9-gigawatt hour (GWh) plant in Korea.

According to industry sources on Tuesday, SK Innovation will set up an EV battery manufacturing base in the northern Hungarian city of Komarom at a cost of around 800 billion won ($734 million). Ground would be broken in February.

Once ready for mass production in 2020, the plant will be capable of producing EV cells with a combined 7 GWh, which is equivalent to powering nearly 200,000 electric cars, according to the sources. Its main EV battery plant in Seosan, central Korea, that added additional lines earlier this year has production capacity of 3.9-GWh.

The company has not disclosed details claiming the deal has not been finalized.

Shares of SK Innovation ended Tuesday at 206,500 won, up 0.24 percent from the previous session.

Komarom is home to Germany’s Audi and Japan’s Suzuki as well as German auto parts supplier Continental and near the Hungarian production base of Mercedes Benz, the Korean firm’s main client.

SK Innovation has mulled establishing an EV battery manufacturing base in Europe to win the fast-growing European EV market. Hungary and the Czech Republic have been its two candidates for new factory site.

Once the company builds an EV battery plant in Hungary, Korea’s all three major EV battery makers will be producing from Europe. LG Chem Ltd. is constructing an EV plant in Poland and Samsung SDI Co. finished building one in Hungary May this year.

By Park Joon-hyung and Cho Jeehyun

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