SK On and BASF to collaborate on LFP batteries

Ford and Hyundai battery partner to try to play catch up on China-dominated chemistry

SK On and BASF to collaborate on LFP batteries
SK is ultimately headquartered in Seoul, South Korea

South Korean battery firm SK On, a long-time battery partner of Western OEMs, and German chemicals company BASF have announced an agreement “to jointly evaluate collaboration opportunities in the global lithium-ion battery market”.

The two firms will target the North American and Asia-Pacific markets, possibly leveraging SK On’s South Korean base to make its batteries eligible for US subsidies. After SK On unveiled a pilot LFP battery product in March, the firm now appears to be laying the groundwork to expand its LFP product offerings.

“Initially, BASF and SK On will focus on evaluating collaboration options for cathode active materials (CAM) production. Further details on the collaboration will be revealed at a later stage,” the firms say.

SK On has specialised in the production of nickel-cobalt-manganese (NCM) batteries and has inked deals with several OEMs, including Ford and Sino-Swedish Polestar, to supply NCM cells.

LFP technology has long been the speciality of Chinese battery firms, including global market leader Catl. South Korean firms, on the other hand, have typically focused on NCM chemistry.

SK On will therefore look to leverage BASF’s experience in cathode materials for LFP batteries, which BASF says extends from nickel cobalt aluminium (NCA) oxides and NCM oxides, as well as to producing anode binders.

A rapid increase in demand for both battery chemistries is expected. In particular, LFP demand will be 3,800GWh by 2030 and almost 8,000GWh in 2040, according to Will Talbot of consultancy Benchmark Mineral Intelligence, equivalent to a 15pc pa increase.

NCM chemistry also faces a challenge that a lower proportion of its requisite minerals are currently compliant with US incentives under the Inflation Reduction Act, compared to LFP chemistry batteries.

“The market share of LFP is going to grow but we do not see a world in which the EV space is only dominated by LFP or any one chemistry,” Talbot predicts. “There is plenty of room in the market for both NCM and LFP.”

Western OEMs have lined up partnerships with South Korean and Japanese firms such as LG Energy Solutions and Panasonic, but LFP expertise is lacking outside of China. An effort by South Korean firms like SK On to catch up on LFP chemistry could provide a way for Western manufacturers to reduce reliance on Chinese knowhow in LFP manufacturing, which offers automakers cost advantages over current NCM batteries.

SK On has six EV battery plants either operational or under construction in the US, across so-called 'battery belt' states Georgia, Tennessee and Kentucky. These include SK Battery America, an SK On subsidiary which has two EV battery plants completed and running in Commerce, GA; Blue Oval SK, a joint venture between Ford and SK On to manufacture batteries in Glendale, KY and Stanton, TN, for future Ford and Lincoln EVs (although Ford has announced a pause on the Kentucky plant); and a joint venture announced in April between SK On and fellow South Korean firm Hyundai Motor Group in Bartow County, GA, for future Hyundai and Kia EVs.

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