SEOUL -- South Korea's SK Innovation, said it will invest 1.3 trillion won ($1.16 billion) to build its third battery plant in Hungary.
The company, which supplies batteries to Volkswagen Group, Ford and Hyundai Motor Group among others, will begin construction in the third quarter of this year, the company said.
The plant will have an annual capacity of 30 gigawatt-hours of batteries. The company's first battery plant in Hungary has an annual capacity of 7.5 gigawatt-hours of batteries and began commercial production in the first quarter last year.
The third Hungary plant is a long-term project, which requires a total investment of about 2.6 trillion won up to 2028, SK Innovation said, adding that it plans to raise additional funds through external financing if needed.
Earlier on Friday, SK Innovation said in a regulatory filing that its third Hungary battery plant will target commercial production in early 2024.
The investment comes as global automakers' shift to electric vehicles to comply with environmental regulations, leading to increasing demand for EV batteries.
SK Innovation, which has battery production sites in the U.S., Hungary, China and South Korea, currently has an annual capacity of about 40 gigawatt-hours of batteries, aiming to ramp up its annual capacity of about 125 gigawatt-hours of batteries in 2025.