Nissan Motor Co. will source batteries for its next-generation electric vehicles built in the U.S. from South Korean supplier SK On.

SK On said on March 19 that it will supply Nissan with batteries totaling nearly 100 gigawatt-hours from 2028 to 2033. That’s enough volume to power up to 1.25 million EVs, according to AutoForecast Solutions.

Automotive News reported in February that Nissan was in discussions for a new U.S. battery supplier.

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In 2028, Nissan plans to begin production of four battery-powered models at the Canton, Miss., factory that builds the Frontier pickup and Altima sedan.

SK On, a subsidiary of South Korea’s SK Group, operates two U.S. battery plants and is building four additional plants with partners. Once fully operational, SK On’s annual U.S. production capacity is expected to top 180 gigawatt-hours.

Battery source

SK On did not say which of its current or planned cell factories would supply Nissan. A person familiar with the matter said Nissan could get cells from more than one SK factory and that those details are being finalized.

One person with knowledge of the situation said SK’s battery manufacturing joint venture with Ford Motor Co. in Hardin County in Kentucky could be a source of Nissan cells.

Ford has delayed one of two battery plants it’s building in Kentucky, opening the door for SK to supply another customer from there.

If Nissan were to use some of that plant’s capacity, it would be the first time a Detroit automaker has allowed one of its battery plants to supply a competitor.

A Ford spokesperson declined to comment.

AutoForecast Solutions EV analyst Conrad Layson said Nissan’s battery volumes put it “at the edge of needing its own gigafactory.”

Switching suppliers

Nissan last year unwound a partnership in the U.S. with Japan-based AESC, which for more than a decade had supplied batteries for the Leaf, the country’s first affordable and mass-produced EV.

AESC, owned by China’s Envision Group, continues to supply Nissan with batteries in the U.K. and Japan.

According to a person familiar with the matter, Nissan switched battery suppliers in the U.S. because AESC could not assure the automaker that its batteries would comply with sourcing rules under the U.S. Inflation Reduction Act. That would make Nissan EVs with AESC batteries ineligible for the $7,500 federal tax credit.

“Nissan requires [battery suppliers] to guarantee that there will be no FEOC issue,” the person said earlier, referring to the term “foreign entity of concern,” which includes companies in — and in some cases subsidiaries owned or controlled by — China, Iran, North Korea or Russia.

EVs that contain battery components or critical minerals sourced from a foreign entity of concern are ineligible to receive the tax credit, which the Trump administration has proposed eliminating. The ban went into effect in 2024 for components and in 2025 for critical minerals.

“IRA is a big part of the consideration,” the person said.

Cost and battery technology also played into Nissan’s decision to look elsewhere.

Michael Martinez contributed to this report.