Nissan Motor Co. Ltd is in talks with South Korean battery manufacturer SK On Co. Ltd for the potential production of EV battery supplies in the United States, Yomiuri Shimbun reported on Friday. An agreement would lead SK On, ranked fifth globally among EV battery producers, to establish a battery plant in the US specifically for Nissan.

What We Know About This Partnership So Far

Industry insiders revealed that both parties are actively working out the specifics of this collaboration, with expectations to finalize discussions in the coming months. This partnership is anticipated to be a key component of Nissan’s three-year business strategy, which will be announced soon.

The Timeline

The timeline suggests that by 2026 or 2027, SK On might begin the provision of EV battery supplies to Nissan’s facilities in the United States, aligning with Nissan’s EV launch schedule. Such a partnership would make the Japanese auto giant’s EVs eligible for US subsidies under the 2022 Inflation Reduction Act. Currently, Nissan’s EVs, which use batteries from Envision AESC of China, do not qualify for these incentives.

Despite Nissan’s struggles in the US EV market, with sales totaling only 20,000 vehicles in 2023 compared to Hyundai Motor Co. and Kia Corp.’s 82,269 units, the Japanese automaker is seeking strategic partnerships, including potential partnerships with Honda, to boost its market performance.

SK On’s Global Expansion and Challenges

The partnership with Nissan is poised to amplify SK On’s global expansion efforts. SK On has ambitious plans in the US, including three battery plants in Kentucky and Tennessee, a joint venture with Ford Motor Co. valued at $11.4 billion. However, this project has faced delays due to a slower transition to EVs than expected.

Additionally, SK On has committed to building a battery factory in Georgia with Hyundai Motor. To support these endeavors, SK is seeking up to 2 trillion won ($1.5 billion) in funding. The company is focused on profitability, with an initial public offering planned for 2026.

This partnership between Nissan and SK On signifies a pivotal moment for both companies as they navigate the complexities of the global EV market. It shows the importance of strategic collaborations in meeting the challenges of transitioning to sustainable transportation solutions.

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