SK On signed a memorandum of understanding (MOU) with Hyundai Motor Group to strengthen the North American electric vehicle (EV) battery supply chain, the company said on Nov. 29.
The signing ceremony of the MOU took place at SK Group Headquarters in Jongno, Seoul, Korea, on November 29 (KST) with participants including SK On Chief Administrative Officer Choi Young-chan, Hyundai Motor Company Executive Vice President and Head of Corporate Future Growth Planning Division & EV Division Kim Heung-soo, and other representatives from both companies.
Under the MOU, both parties will cooperate to provide SK On batteries to the Group’s EV plants in the U.S. after 2025. Further details on the cooperation shall be revealed at a later stage.
Hyundai Motor Group is promoting a plan to produce various EV models in the United States through Hyundai Motor Alabama Plant (HMMA), Kia Georgia Plant (KaGA), and Hyundai Motor Group New Plant (HMGMA). Meanwhile, SK On is currently operating its own EV battery factory in Georgia, the U.S.
The MOU is also expected to further strengthen the two companies’ partnership. SK On’s batteries are already installed in the Hyundai IONIQ 5, IONIQ 6, and Kia EV6.
In addition, the cooperation between Hyundai Motor and SK On is anticipated to have a great effect in responding to the US Inflation Reduction Act (IRA).
This means a series of IRA restrictions that lead to production/processing of key minerals for electric vehicle batteries and assembly of electric vehicles can be met through cooperation between the two companies.
To secure lithium, a key material for making EV battery cells, SK On recently signed purchase contracts with resource development companies in countries that have signed FTAs with the U.S. including Australia and Chile, taking quick steps to meet IRA requirements.
SK On Chief Administrative Officer Choi said, “We expect the cooperation between SK On and Hyundai Motor Group to create a big synergy.” “With the latest MOU, both sides can hold a solid position in the process of electrification in the North American auto market,” he continued.
“Through the EV battery MOU, we will be able to further accelerate U.S. market EV growth,” said Hyundai Motor Executive Vice President Kim. “We expect the stable supply of EV batteries from SK On will enable us to focus on securing EV leadership in the U.S. market.”