South Korean Conglomerate SK Innovation has recently signed a battery supply contract with Chinese smart carmaker Xpeng Motors and will supply Xpeng with high grade nickel-based Lithium Ion batteries according to Chinese media outlet Autohome. The head of SK Innovation refused to disclose any details related to its clients and declined to comment.
The report said that SK Innovation will provide Xpeng Motors with batteries consisting of 80% nickel. The more nickel a battery has, the longer electric vehicles can drive. For this reason, the battery industry is very competitive in developing high grade nickel-based battery.
An industry insider said, “SK Innovation has reached an agreement with Xpeng Motors and will supply electric vehicle batteries produced in its Chinese plants in the near future.”
SK’s factory in Huizhou, Guangdong, will provide the batteries. The plant is the company’s third battery factory in China with an annual production capacity of 10GWh.
SK Innovation is a subsidiary of SK Group, the third largest multinational conglomerate in Korea. The company started the development of lithium-ion batteries for hybrid electric vehicles back in 2005 and has produced them since 2006.
Xpeng Motors has many suppliers for power batteries, including Contemporary Amperex Technology Co., Limited and EVE Energy Co., Ltd. The company uses two types of batteries, Lithium Iron Phosphate and Ternary Lithium batteries. The battery supply contract with SK may be aimed at Xpeng’s expansion of production capacity.
Xpeng Motors initiated the construction of Zhaoqing Phase II Factory in Guangdong on August 18. Upon completion of the factory, its annual output is expected to increase from the current 100,000 vehicles to 200,000 vehicles. In the second half of 2021, Xpeng Motors launched its G3i and P7 successively. The increase in sales volume and output will inevitably bring about an increase in battery demand.