Sungsung ST will invest 12.6 billion won in facility investment to respond to a recovery in the European electric vehicle market. The company said on Feb. 9 it decided to provide a debt guarantee for borrowing by its Poland unit to fund facility investment. The guarantee totals 7.3 million euros, about 12.6 billion won, equal to 12.3 percent of Sungsung ST’s equity.

The decision aims to respond to order volumes for battery module parts that the Poland unit supplies to LG Energy Solution’s Poland plant. The company plans to secure facility investment funds in a stable way and expand production capacity. Sungsung ST is mass-producing battery module parts for global automakers locally.

Sungsung ST said Europe’s electric vehicle market is expected to see a recovery in subdued consumer sentiment as policy support and regulatory changes intersect, with Germany deciding to resume electric vehicle purchase subsidies of up to 6,000 euros from this year. It also expects global automakers’ electric vehicle production schedules to accelerate as emissions regulations are applied in stages from this year.

Sungsung ST has been pushing to build a water-cooled thermal management manufacturing line at its Kentucky unit in the United States, a trend it said has emerged as a key one in the ESS market. It has continued preparations for full-scale mass production, including a $35 million debt guarantee in January last year and, more recently, a $10 million capital increase for purchasing raw materials and stabilising initial yields.

A Sungsung ST official said the company has secured large-scale orders related to the project. The official said it will use the investment to automate and advance the local production line in Poland and respond proactively to customer requirements. The official added that it will expand the share of ESS parts through its Kentucky unit while increasing the share of EV parts at its Poland unit. The official said it will strengthen its position supplying secondary battery parts in the two major markets of North America and Europe.