SK Innovation to supply EV batteries to Mercedes-Benz

SK Innovation has signed a contract with Mercedes-Benz to supply battery cells for the German automaker's next-generation electric vehicles (EVs), which will debut in 2017, the company said Wednesday.

But Korea's largest refiner and EV battery cell maker declined to unveil the size of the deal, citing a confidentiality agreement with Mercedes-Benz.

SK said the latest deal proves its status as global leadership in the manufacture of lithium ion battery cells. It fiercely competes with LG Chem and Samsung SDI to strike deals with global carmakers.

"Mercedes-Benz will form our battery cells into packs to use them for its upcoming EVs," an SK Innovation official said. "With our battery cells, the German premium carmaker plans to expand its clean-energy EV lineup in full scale. The latest deal shows that we possess globally competitive technologies and manufacturing capabilities for EV batteries."

The official said SK Innovation will further strengthen its position in the global battery market with its differentiated performance and technologies. "We will also reinforce our relations with clients and make greater efforts to do business with others."

Last July, the company doubled the production capacity of its battery plant in Seosan, South Chungcheong Province. The plant has been operating at 100 percent capacity to meet increasing demand, it said.

With the latest order from Mercedes-Benz and possibly more from other automakers, the company plans to expand its manufacturing capacity in Korea and China.

SK Innovation projects the global EV market to reach 6 million by 2020 in line with strengthening environmental regulations in Europe, China and the United States. In particular, plug-in hybrids and battery EVs are expected to outgrow hybrid EVs.