South Korean battery maker SK Innovation has signed on to supply Xpeng Motors with batteries containing 80% nickel. This was reported by the Korean media outlet ET News reported on Monday.
High nickel-based lithium-ion batteries have higher capacity and cost less to produce. The high energy density that nickel provides makes them the preferred battery for electric vehicles.
An industry insider told ET News that SK Innovation’s batteries for Xpeng will be produced at factories in Huizhou, Guangdong Province.
The South Korean battery maker is planning to expand its presence in China by building a fourth factory in the country. The company said last week that it will invest USD 1.04 billion in a new production facility, but did not disclose further details.
SK Innovation has battery production sites in South Korea, China, the United States, and Hungary. Its clients include Volkswagen and Ford in the US, Daimler in Europe, and Hyundai Motor and Kia in Asia.
The agreement between Xpeng and SK Innovation suggests the EV maker is diversifying its suppliers for a key component as its order numbers ramp up. We just reported that Xpeng’s deliveries grew 459% YOY.
Xin Guobin, the vice minister of the Ministry of Industry and Information Technology said at a conference that the country will secure a supply of key raw materials—including lithium, cobalt, and nickel—to shore up domestic auto production capabilities. Since the beginning of 2021, the price of raw materials has skyrocketed and EV power cells are in short supply.