SK On and Nissan in Talks to Supply Batteries to the US

SK On Co., a South Korean battery maker, is in talks to supply battery cells for Nissan's US electric vehicles (EVs). This partnership could qualify Nissan EVs for U.S. Inflation Reduction Act subsidies and accelerate SK On's global expansion and profitability.

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SK On Company from South Korea and Nissan Motor Company from Japan are currently engaged in discussions to collaborate on producing battery cells for Nissan’s EVs in the United States. SK On, known as the world’s fifth-largest manufacturer of EV batteries, is preparing for an initial public offering (IPO) in 2026.

The companies are finalizing the details of the collaboration and aim to complete discussions in the coming months. Nissan anticipates the start of battery supply between 2026 and 2027, and intends to integrate this collaboration into its three-year business plan. A successful agreement could result in the establishment of a battery facility in the U.S., supporting Nissan’s manufacturing efforts and enabling its EVs to qualify for U.S. incentives under the 2022 Inflation Reduction Act. Notably, Nissan’s current battery provider, Envision AESC does not meet the requirements for these subsidies.

Relates news:

In 2023, Nissan faced a gap in EV sales compared to rivals like Hyundai and Kia within the U.S. market. Teaming up with SK On has the potential to enhance Nissan’s competitiveness in the electric vehicle sector and align with their endeavors towards advancing core EV components through collaboration with Honda. In line with these objectives, SK On is expanding its footprint within the U.S. by planning three battery facilities alongside Ford in Kentucky and Tennessee, as well as establishing a joint venture with Hyundai Motor in Georgia. The company is looking to secure 2 trillion won (equivalent to $1.5 billion) in funding for these initiatives and plans to achieve profitability before its scheduled initial public offering.

This potential partnership is an important component of SK On’s longer-term plan to boost its presence in the global market and enhance profitability within the EV battery sector. It highlights the growing importance of international collaboration as the automotive industry transitions towards electric mobility.

Source: The Korean Economic Daily

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