SK Innovation Co., a South Korean refinery-to-battery company, said Friday it will invest 1.3 trillion won ($1.2 billion) in its Hungary subsidiary to expand its electric vehicle battery production in Europe.

SK Innovation said its investment in SK Battery Hungary Kft. is aimed at building "a new battery factory in Europe."

The investment is expected to build a third battery factory in Hungary, as the company has been stepping up production capacity to meet growing demand for EV batteries by major automakers.

Currently, SK Innovation runs a plant with an annual capacity of 7.5 gigawatt-hours (GWh) in the northwestern Hungarian city of Komarom.

SK Innovation has also been working to complete its second plant with a capacity of 9.8 GWh, next to the first plant, by 2022.

Komarom is home to assembly lines of German carmaker Audi and is not far from a plant of another German automaker, Daimler AG, which owns Mercedes-Benz. (Yonhap)