Benz EV battery deal gives boost to SK Innovation

 A deal with German luxury carmaker Mercedes-Benz is expected to give a boost to SK innovation’s electric vehicle battery business, analysts said.

SK Innovation, the holding company of SK Group’s energy-related businesses, announced Wednesday that the company had been selected as a lithium ion battery cell supplier for Mercedes-Benz passenger cars.

It is the fourth major battery deal that SK Innovation has won from a global automaker, following others with Hyundai Motor Group, Beijing Automotive Industry Holding and Mitsubishi.

“The partnership with Mercedes-Benz will help SK Innovation position itself as a top-tier global battery cell-maker,” a company official said. 

The company declined to mention the specific car models that will use its battery cells, only saying the deal was a large-scale one and so multiple Mercedes-Benz electric vehicles in diverse segments would adopt SK’s battery cells.

Industry watchers forecast that the German luxury carmaker could use SK products in one of four new EV models to be launched in 2018. The company recently launched a project to develop a green car platform for four EV models in 2018, including an EV sedan positioned between its C and E-class lineup.

The deal with Mercedes-Benz is also expected to lead to the expansion of SK Innovation’s production facilities as its battery cell line in Seosan, South Chungcheong Province, has already reached capacity. 

‘In line with the growth of EVs, SK Innovation plans to capitalize on its battery business this year as a new income growth engine,” the company official said.  

The energy firm forecasts that the global EV market will reach 6 million units by year 2020, due to strengthening environmental regulations in Europe, China and the U.S.. By EV type, plug-in hybrid and battery electric vehicles are expected to outgrow hybrid electric vehicles, it added.  

By Seo Jee-yeon (jyseo@heraldcorp.com)