South Korea's SK On is gearing up to power Japan's Nissan in a groundbreaking Electric Vehicle (EV) battery supply collaboration. This strategic alliance aims to bolster Nissan's supply chain overhaul while promising a significant boost to SK On's financial performance.
In a move highlighting the accelerating pace of the EV industry, SK On has tasked its partners with developing equipment and components tailored to Nissan's battery specifications, according to industry insiders cited by South Korean media ET News. The partnership, though not yet finalized, is in advanced negotiations concerning production sites, supply volumes, and contract values. SK On, maintaining a strategic silence, declined to divulge specific customer details.
The focal point of this collaboration is the development of NCM pouch batteries, a sophisticated technology poised to take more than two years from development to performance validation. Industry projections indicate that these cutting-edge batteries will enter mass production by late 2026 or early 2027, powering Nissan's forthcoming generation of electric vehicles.
Analysts speculate that SK On will leverage its state-of-the-art plant in Georgia, USA, initially earmarked for Volkswagen's EV batteries, with potential line conversions to accommodate Nissan's demands. This strategic pivot underscores the dynamic nature of SK On's manufacturing capabilities.
Rumors of a joint venture plant in the US have surfaced, yet financial constraints on both sides render this prospect unlikely. Instead, SK On might utilize its joint venture facility with Ford, BlueOvalSK, to meet production needs.
Historically, Nissan has relied on Envision AESC, a battery maker that originated within Nissan and was later acquired by China's Envision Group. However, the US Inflation Reduction Act (IRA) has reshaped the landscape, disincentivizing the use of Chinese-made batteries to qualify for subsidies. This legislative shift has prompted Nissan to diversify its supply chain, positioning SK On as a critical partner.
For SK On, this partnership with Nissan is a potential game-changer. Since its inception in 2021, SK On has yet to achieve profitability and has recently embarked on an emergency management strategy. The collaboration with Nissan could be the catalyst SK On needs to expand its customer base and enhance its financial health, marking a significant milestone in the competitive EV battery market.
