South Korea's SK Innovation will build its largest European EV battery plant in Hungary, its third in the country in an investment programme totalling $2.3bn, it was announced on January 29.

The largest Hungarian greenfield investment of all time will be launched in Ivancsa, 55km south of Budapest on 70 hectares, creating 2,500 new jobs and enabling the production of 430,000 electric cars per year.

Construction of the plant, with a capacity of 30 GWh, will start in Q3 2021, which is only slightly less than Tesla's "gigafactory" in Nevada, which has a capacity of 35 GWh, said Minister of Foreign Affairs and Trade Peter Szijjarto at a press conference on Friday.

He called the investment “a fantastic success” at a time of enormous health and economic challenges posed by the coronavirus pandemic. He said Hungary had to work "much harder to get the SK Innovation investment amid extremely keen competition" which, he added, together with other Asian investors had turned the country into “a frontrunner in electric battery production in Europe".

The government would provide support for the investment, the scale of which will be disclosed after the agreement with SK Innovation is finalised and the European Union is notified. Based on the scale of the investment it will also be the largest subsidy ever.

Construction of the second production unit of SK Innovation in Komarom, northern Hungary has just been completed, where production is about to start for a capacity of 9.5GWh capacity. The first plant has a capacity of 7.5GWh, for which the South Korean company spent some HUF450bn (€1.25bn)

SK Innovation strives to achieve 125GWh of production capacity by 2025, a significant part of which will be provided by the capacity of the Hungarian plants.

SK Innovation's two existing plants attest to Hungary's competitiveness and Hungarian government officials' committed support, SK Innovation CEO Jun Kim said in a video message. He said the location of the plant is good from a logistics and labour pool perspective and benefits from a complex industrial development strategy.

The investment will solidify Hungary’s position in the EV battery production market. The Orban government has taken steps to reduce the country's dependence on combustion engine technology in the automotive industry, which accounts for roughly a third of industrial output, by opening up to new technologies.

The world’s leading EV battery producers have established their presence in the country. South-Korean Samsung SDI and the Japanese GS Yuasa picked Hungary for their European manufacturing hub.