Nissan has signed a landmark agreement with South Korea’s SK On to supply 20 gigawatt-hours of batteries for its U.S. electric vehicles—enough to power 300,000 EVs. Installation is set to begin by 2028, marking a significant step in Nissan’s U.S. electrification strategy.
The deal comes as Nissan weighs a potential merger with Honda, signaling a broader shift among Japanese automakers to consolidate resources in the competitive EV market. Nissan had previously announced plans to reach 60 GWh of U.S. battery production by 2030 but had not disclosed a supplier until now. The batteries supplied by SK On will be ternary lithium, known for longer ranges, while Nissan continues developing lithium iron phosphate (LFP) batteries in Japan for smaller, budget-friendly models. Larger vehicles like SUVs will rely on the ternary lithium technology.
While Nissan has not revealed the cost of the deal, declining EV demand in the U.S. has driven down battery prices. General Motors and Ford have both scaled back EV production, increasing supply and likely giving Nissan leverage to negotiate favorable terms. Rather than invest in new battery factories, the company opted for direct purchases from SK On to reduce capital expenditures.
Nissan’s EV plans move forward despite regulatory uncertainty. California aims to ban new gas-powered vehicles by 2035, but President Donald Trump recently signed an executive order eliminating federal EV incentives introduced by the Biden administration. In response, California Governor Gavin Newsom pledged to reinstate state-level tax credits to offset the loss.
Nissan’s strategy mirrors moves by other Japanese automakers. Honda is building a U.S. battery plant with LG Energy Solution, while Toyota signed a long-term battery supply agreement with the same company in 2023. With SK On as a key partner, Nissan is positioned to streamline its EV production in the U.S., and potential collaboration with Honda could further define its role in the evolving EV landscape.
