Nissan's EV Revolution: A New Battery Deal with SK On

Nissan, the Japanese automaker, is set to revolutionize its electric vehicle (EV) offerings in the US market with a new battery supply deal with SK On, a South Korean battery manufacturer. This strategic partnership, reported by the Nikkei, is poised to accelerate Nissan's EV production and enhance its competitiveness in the US market.



The collaboration between Nissan and SK On is expected to commence between 2026 and 2027, aligning with Nissan's three-year business plan. This partnership aims to qualify Nissan's EVs for US incentives under the Inflation Reduction Act, making them more affordable and accessible to American consumers.

One of the key advantages of this partnership is Nissan's access to SK On's advanced battery technology. SK On, the world's fifth-largest manufacturer of EV batteries, is known for its expertise in producing high-energy density and cost-effective battery solutions. By sourcing batteries from SK On, Nissan can enhance the performance, range, and affordability of its EVs, better competing with established EV leaders like Tesla and traditional automakers like General Motors and Ford.

Moreover, this partnership aligns with Nissan's long-term business plans, such as the Arc plan and Nissan Ambition 2030. The Arc plan is a comprehensive product offensive to increase electrification, innovative engineering, and manufacturing approaches, while Nissan Ambition 2030 is the company's long-term vision for empowering mobility and beyond. By sourcing batteries from SK On, Nissan can accelerate its EV transition, improve profitability, and expand global unit sales.

However, establishing a new battery plant in the US could face potential challenges, such as time constraints, financial constraints, and geopolitical considerations. Building an entire battery plant in just one and a half years from the investment decision may be challenging, and both Nissan and SK On are facing financial difficulties, which could make it difficult to invest in a new battery plant. A joint venture between the two companies might be necessary to share the financial burden and make the project more feasible.

In conclusion, Nissan's partnership with SK On is a strategic move that will enhance its competitiveness in the US EV market, align with its long-term business plans, and accelerate its EV production. However, the success of this partnership depends on overcoming potential challenges related to time constraints, financial constraints, and geopolitical considerations. As the EV market continues to grow, Nissan's collaboration with SK On positions the company to better compete with other major automakers and capitalize on the increasing demand for electric vehicles.