South Korean electric vehicle (EV) battery manufacturer SK On Company Ltd has signed a deal to supply batteries to Nissan Motor Company’s vehicle assembly plants in the US, according to local reports citing industry sources.
SK On is understood to have agreed to supply Nissan with 20 gigawatt hours (GWh) of batteries, enough to power 300,000 battery electric vehicles (BEVs), in a deal estimated to be worth US$1.8bn.
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Nissan’s BEVs are currently powered by batteries made by China-based Envision AESC, making them ineligible for US subsidies under Inflation Reduction Act (IRA) introduced by the Biden administration in 2022.
Loss-making SK On has been expanding aggressively in the US in the last few years to establish an early presence in the region’s EV battery market. The company has a battery plant in Georgia and additional capacity is being built to supply the local operations of Ford and Hyundai. The company is also building new capacity in South Korea, Europe and China.
SK On has been affected by lower-than-expected growth in BEV demand in key global markets, while the recent election of Donald Trump as the US president has cast more doubt on the segment’s medium-term growth potential in the US.
SK On had been in negotiations with Nissan since early last year, including the possibility of setting up a joint venture, but the Japanese carmaker appears to have delayed plans to ramp up BEV production in the US due to slower than expected growth in this segment. SK On is now understood to have agreed to begin supplying batteries to Nissan from 2028.
Nissan is currently in merger negotiations with Honda Motor, which is expected to result in BEV platform sharing between the two automakers if the merger is completed as planned in 2026.
Honda has a separate joint venture agreement with South Korean battery manufacturer LG Energy Solution to produce EV batteries in the US.
