EcoPro sets sights on Europe with $286 million cathode plant in Hungary

South Korea’s EcoPro Co., a leading battery materials maker, has begun construction of a 380 billion won ($286 million) cathode plant in Hungary, which will serve as its base for business expansion in Europe.

The company last Friday broke ground on the plant on a 440,000 square-meter plot of land in the city of Debrecen, 230 km east of Budapest.

The construction of the facility, in which EcoPro’s three affiliates – EcoPro BM Co., EcoPro Innovation Co. and EcoPro AP Co. – have jointly invested 380 billion won, is slated to be completed by the end of 2024.

Once up and running in 2025, the factory will have an annual production capacity of 108,000 tons of cathodes, enough to produce batteries for 1.35 million electric vehicles.

The plant would mark the first cathode plant in Europe to be built by a Korean battery materials maker.

Lithium-ion cells are composed of four main components – cathodes, anodes, separators and electrolytes.

Cathode materials are made up of nickel, lithium and other materials, and comprise around 40% of the cost of electric vehicle batteries.

EcoPro is the world’s largest cathode manufacturer.

Major participants of the groundbreaking ceremony included EcoPro Chairman Lee Dong-chae, Hungarian Foreign Minister Péter Szijjártó, Korean Ambassador to Hungary Hong Kyu-dok and Debrecen Mayor László Papp.

GREATER EV MARKET THAN CHINA

EcoPro unveiled its Hungary project in 2021 to grab a greater share of the fast-growing European battery materials market.

The company said at the time it aims to ramp up its annual cathode materials production capacity worldwide to 480,000 tons, enough for 6 million EVs, by 2026 with an investment of 2.8 trillion won in Korea, North America and Europe.

The European plant in Hungary will supply most of the products to Samsung SDI Co., which runs a battery plant in Göd, Hungary.

SK Innovation Co.' s battery affiliate SK On Co. is also building a $2.29 billion battery plant in Hungary.

Meanwhile, LG Energy Solution Ltd., a battery unit of LG Chem Ltd., is looking to expand its capacity at its plant in Poland to enhance its presence in Europe.

According to market tracker SNE Research, the global market for the four battery materials – cathodes, anodes, separators and electrolytes – is expected to reach $147.6 billion by 2030.

Europe is emerging as a greater EV market than China, currently the world’s single largest, on the back of tighter regulations and hefty subsidies. More than half of the world’s EVs are forecast to be sold in Europe by 2025.

“Our Hungarian plant will be the stepping stone for us to increase our sales across Europe,” said an EcoPro official.

Write to Jae-Fu Kim at hu@hankyung.com

In-Soo Nam edited this article.