Daimler's Mercedes-Benz has signed a sourcing deal with South Korea's SK Innovation for electric vehicle (EV) batteries.

SK Innovation, primarily an oil refining company belonging to local conglomerate SK Group, built its first battery plant in Seosan, 150km south of the country's capital city Seoul, in 2012. 

The factory has the capacity to produce 15,000 lithium-ion battery sets per year, which it supplies to Kia Motors and China's Beijing Automotive Industry Holdings. The company plans to expand capacity further when required.

South Korea's two largest EV battery manufacturers are LG Chem and Samsung SDI which have supply contracts with most major global automakers.