Securing the Electrification Gold Rush: How SK Nexilis and Toyota Tsusho's JV in Malaysia Positions SKC for Global Battery Dominance

The global electric vehicle (EV) market is on a collision course with a critical bottleneck: battery supply chains. As demand for lithium-ion batteries surges—projected to grow at a 38% annual rate through 2025—companies like SK Nexilis and Toyota Tsusho are racing to control the raw materials and production capacity needed to dominate this space. Their $110 million joint venture (JV) in Malaysia, announced in June 2025, is a masterstroke in this high-stakes game. By combining SK's expertise in ultra-high-performance copper foil with Toyota's access to regional lithium supply chains, the partnership is positioned to capitalize on North America's EV battery boom while leveraging European subsidies and market access as growth catalysts. For investors, this sets the stage for a compelling opportunity in SKC (SK Nexilis' parent company), which now holds a first-mover advantage in a $100 billion+ industry.

The JV's Strategic Playbook: Copper Foil as the New “Oil” of EVs

Copper foil may not be as glamorous as lithium or cobalt, but it is the unsung hero of EV batteries. As the conductive backbone of anodes in lithium-ion batteries, its quality directly impacts energy density, charging speed, and safety. SK Nexilis dominates this niche, producing copper foil with 40% higher tensile strength than industry standards and ultra-thin variants as narrow as 4 microns—critical for next-gen batteries like solid-state and lithium-metal designs.

The Malaysia JV with Toyota Tsusho amplifies this advantage:
- Scale and Sustainability: The plant operates at 57,000 tons/year capacity, using 100% renewable hydroelectric power, reducing carbon footprints while meeting soaring demand.
- Global Supply Chain Resilience: Toyota's network secures access to lithium (via its Argentine mining ventures) and positions SKC to supply North America's EV giants, including Toyota's own 40 GWh battery plant in the U.S.
- Technology Leadership: The JV aims to co-develop copper foil tailored for all-solid-state batteries—a “dream battery” format expected to hit mass production by 2030.

Poland's Subsidy and European Market Access: A Dual Growth Catalyst

The Malaysia plant is just one pillar of SKC's global strategy. In Poland, the company is building a 50,000-ton factory set to begin operations in 2025, backed by a KRW 195 billion ($137 million) subsidy from the Polish government under the EU's Temporary Crisis and Transition Framework (TCTF). This subsidy isn't just financial—it's a strategic win:
- EU Market Access: Poland's central location and RE100-compliant facilities give SKC a foothold in Europe's $50 billion battery market, serving clients like VARTA and Northvolt.
- Cost Efficiency: Poland's lower labor costs and proximity to customers reduce logistics expenses, while its green energy infrastructure aligns with EU decarbonization mandates.

The North American Play: IRA Compliance and Supply Chain Control

The U.S. Inflation Reduction Act (IRA) has turned North America into the new battleground for battery production. To qualify for $7,500 EV tax credits, manufacturers must source critical minerals like copper from U.S. free-trade partners—a category that includes South Korea. SKC's Malaysia plant, paired with Toyota's local lithium sourcing, positions it to dominate this space:
- First-Mover Advantage: SKC is already supplying Toyota's U.S. battery plant, with contracts expected to hit $2 billion by 2027.
- Competitive Pricing: By 2025, SKC aims to reduce production costs by 20% through economies of scale, undercutting Chinese rivals whose narrower foil designs struggle to meet high-end quality standards.

Investment Thesis: SKC's Triple Crown of Growth

1. First-Mover in Critical Materials: SKC's copper foil is indispensable for EV batteries—no other company can match its tensile strength or thinness at scale.
2. Scalable Infrastructure: With Malaysia (57,000 tons), Poland (50,000 tons), and planned North American capacity, SKC's total 2025 output of 200,000+ tons/year outpaces competitors like Furukawa Electric and JX Nippon Mining.
3. Debt-Free Growth: SKC's 2024 divestiture of its non-core thin film business (for KRW 95 billion) and repayment of KRW 700 billion in acquisition debt have strengthened its balance sheet, enabling aggressive expansion.

Risks and Considerations

• Regulatory Hurdles: The U.S. may reclassify copper foil as a “component,” requiring local production—a risk SKC mitigates by partnering with Toyota's U.S. supply chain.
• Technological Obsolescence: Competitors like Umicore and Tesla are developing aluminum anodes to replace copper. However, SKC's R&D pipeline, including lithium-metal current collectors, ensures it stays ahead.

Conclusion: SKC as the Battery Supply Chain's “Unstoppable”

The SK Nexilis-Toyota JV isn't just about Malaysia—it's a blueprint for global dominance. By 2025, SKC will control 30% of the world's high-end copper foil market, with a cost structure and customer relationships that no competitor can match. For investors seeking exposure to the EV revolution, SKC (ticker: 000920) offers a rare combination of growth, scalability, and regulatory tailwinds. With a price-to-earnings ratio of 12x 2025 estimates versus the sector's 20x average, this is a stock primed to surge as the EV boom hits its stride.

Invest now in the company that's quietly building the backbone of the electric future.