Nissan Partners with SK On for U.S. EV Batteries: A Bold Step Toward Global EV Leadership!
Nissan Motor Co. is making a significant move to strengthen its electric vehicle (EV) business by partnering with South Korea’s SK On to procure batteries for its U.S. market. According to a report by the Nikkei, the collaboration will begin around 2028, marking a pivotal step in Nissan’s turnaround strategy as it seeks to ramp up its EV production and compete in the rapidly evolving global market.
This partnership comes as Nissan works to overcome financial challenges, streamline operations, and position itself as a key player in the EV revolution.
Contents
Nissan-SK On Partnership: Key Details
Nissan and SK On have agreed to supply 20 Gigawatt-Hour (GWh) worth of ternary lithium batteries annually. This capacity is enough to power approximately 300,000 standard EVs, ensuring a steady supply of high-performance batteries for Nissan’s U.S. operations.
Why This Partnership Matters
- Strengthening U.S. EV Operations:
- With the U.S. EV market growing rapidly, securing a reliable battery supply is critical for Nissan to meet demand and remain competitive.
- Focus on Ternary Lithium Batteries:
- These batteries, known for their high energy density and efficiency, are ideal for long-range EVs, aligning with consumer expectations in the U.S.
- Alignment with U.S. Policies:
- The partnership supports the U.S. government’s push for localized EV production and supply chains, helping Nissan comply with regulations and incentives.
Nissan’s Broader EV Strategy
The partnership with SK On is part of Nissan’s larger plan to revitalize its EV business and streamline global operations.
Compact EV Production in Kyushu
Nissan is also considering producing compact EVs at its plant on Kyushu island in Japan. This move, confirmed by Nissan executive vice president Hideyuki Sakamoto, is expected to begin in the business year starting April 2028.
- Why Kyushu?
- The Kyushu region offers a geopolitical advantage and is a cost-effective manufacturing base.
- Nissan plans to utilize this facility to boost profit margins by bringing ultra-compact EV production in-house.
Cost-Cutting Measures
As part of its turnaround plan, Nissan has been working to:
- Reduce global manufacturing capacity by 20%.
- Slash 9,000 jobs globally.
However, Sakamoto clarified that there are no plans to cut production capacity at the Kyushu plant, emphasizing its strategic importance.
Nissan-Honda Merger Talks: A Historic Shift
Nissan’s EV expansion efforts come amidst ongoing talks to merge with Honda Motor Co. by 2026. If successful, this merger would represent a historic pivot in Japan’s auto industry, driven by the growing threat from Chinese EV manufacturers.
Why the Merger Matters
- Combining Resources:
- A merger would allow Nissan and Honda to pool resources, reduce costs, and compete more effectively in the global EV market.
- Facing Chinese Competition:
- Chinese automakers have rapidly gained market share in the EV space, posing a significant challenge to legacy automakers like Nissan and Honda.
- Strengthening Global Presence:
- Together, Nissan and Honda could create a stronger global footprint, particularly in key markets like the U.S., Europe, and Asia.
What This Means for Nissan’s Future
Nissan’s partnership with SK On and its plans for compact EV production signal a clear commitment to strengthening its EV portfolio and global competitiveness. By securing a steady battery supply and optimizing production, Nissan is positioning itself to meet the growing demand for electric vehicles while improving profitability.
The potential merger with Honda further underscores the urgency for Japanese automakers to adapt to the rapidly evolving EV landscape. If successful, these strategic moves could help Nissan regain its footing and emerge as a stronger player in the global EV market.
