SK On in talks with Nissan to supply batteries in US

South Korean rechargeable battery maker SK On Co. is in talks with Nissan Motor Co. to jointly produce battery cells for the Japanese carmaker in the US, the Yomiuri Shimbun reported on Friday.

If they reach an agreement, the world's fifth-largest EV battery producer will likely team up to build an electric vehicle battery plant in the US for supply to Nissan’s plant there, according to industry sources.

The Japanese newspaper said the two companies are working out the details of their possible collaboration, and are aiming to wrap up discussions within the next few months.

Nissan is expected to include a business partnership with SK On in its three-year business plan to be released later this month, according to the report.

Considering Nissan’s EV launch timetable, SK On is expected to start supplying batteries to Nissan’s US plant in 2026 or 2027.

Their battery alliance, if formed, will qualify Nissan EVs for subsidies in the US by meeting the requirements of the US Inflation Reduction Act signed into law in 2022.

Currently, all Nissan EVs are powered by batteries made by China-based Envision AESC, so they are ineligible for US subsidies.

In 2023, Nissan sold just 20,000 EVs in the US, about one-fourth of the 82,269 units sold by both Hyundai Motor Co. and Kia Corp. under the Hyundai Motor Group.

According to Yomiuri, Nissan is considering securing and developing core EV components in collaboration with Honda to catch up to the first movers in the EV market.

Allying with Nissan is expected to boost SK's global push.

SK On plans to build three US battery plants in partnership with Ford Motor Co. in Kentucky and Tennessee in a project worth $11.4 billion, which was postponed due to the slower-than-expected transition to EVs.

It also agreed to build a battery cell factory in the US state of Georgia jointly with Hyundai Motor.

To fund the construction, SK is seeking to raise up to 2 trillion won ($1.5 billion).

It is striving to turn a profit, with an aim to go public in 2026.

Write to Hyung-Kyu Kim and Nan-Sae Bin at khk@hankyung.com

Yeonhee Kim edited this article.