Nissan rumoured to sign supply deal with SK On

Media reports have leaked that Nissan has signed a battery supply deal with SK On for electric car batteries. The news has not been officially confirmed, however. Should the deal go through, Nissan will receive 20 GWh of batteries from 2028.

According to the report by the Japanese business publication Nikkei, SK secured a $1.8 billion contract to supply electric car batteries to Nissan’s US plants from 2028. According to industry sources, the South Korean battery manufacturer agreed with Nissan on Thursday to supply 20 GWh, enough for around 300,000 electric cars.

The two companies have some history together and had announced plans to build a battery factory together in the USA early last year. This was slated to start production by 2026, which is also the time frame SK On is considering for the production start of its LFP batteries. According to media reports, SK On will supply the batteries from one of its factories in the USA, which could mean either the factory in Georgia, or one of the two joint plants with Ford in Tennessee or Kentucky.

In addition to the battery deal, Nissan has confirmed that it plans to produce compact electric cars at its facility in Kyushu. The company is currently still in the middle of its planned merger with Honda, which was announced towards the end of last year. Additionally, Nissan is still working on streamlining its business; a process which will cost 9,000 jobs and slash 20% of its global manufacturing capacity. This is also notable as the company announced yesterday that it would also not build its compact crossover EV in the USA, instead planning to manufacture the vehicle in the factory in Sunderland, UK. This may also be a reaction to the newly sworn-in U.S. president and his take on subsidies and vehicle technology.

“The Kyushu region is also a highly competitive base geopolitically, so we would like to utilise it,” said Nissan executive vice president Hideyuki Sakamoto on the subject of the new production location.

SK On has also been struggling lately, having reported a quarterly operating loss for 11 consecutive quarters until Q2 of last year, when things started to turn around, as kedglobal writes. The report also estimates that the value of the battery supply deal with Nissan is worth around $1.78 billion. The second quarter of 2024 was also the time when SK On started looking to expand its product portfolio with prismatic cells, as well as reporting progress on its solid-state battery technology. Last summer, the planned factory with Ford and EcoPro BM was also delayed due to Ford’s changed priorities in the electric vehicle sector due to weak demand.

nikkei.com (paywall), reuters.com,