South Korean electric vehicle (EV) battery manufacturer SK On announced it had signed a non binding memorandum of understanding (MoU) with US energy group ExxonMobil “for a potential lithium offtake agreement in the US” to strengthen its battery supply chain in the region.

SK On said the preliminary agreement was signed this week on the sidelines of the Fastmarkets Lithium Supply and Battery Raw Materials Conference in Las Vegas, involving a multi year deal to secure up to 100,000 tonnes of lithium from ExxonMobil’s project in Arkansas.

SK On said it was seeking to develop a stable supply of key battery minerals in the US where the company is expanding with a number of EV battery joint ventures and standalone plants.

The company currently operates two EV battery plants in Georgia and is building three additional plants in the US – two as part of its BlueOval venture with Ford Motor in Kentucky and Tennessee and one with Hyundai Motor in Georgia.

SK On said it aimed to have annual battery production capacity of 180GWh by 2025, enough to power around 1.7m new EVs per year. The deal with ExxonMobil would help it produce batteries which meet content rules under the US Inflation Reduction Act (IRS) which provides EV buyers access to tax credits worth up to US$7,500.

SK On said the deal would help ExxonMobil achieve its goal of supplying lithium for 1m EV batteries annually by 2030 and support the US government aim of establishing a domestic EV supply chain.

Park Jong-jin, SK On’s EVP of strategic procurement, said his company “has been working with global partners to secure key battery raw materials in a move to support our growing US manufacturing base and lead electrification in the region. Through this partnership with Exxon Mobil, we will continue strengthening battery supply chain in the US”.