Bezos-backed EV startup inks $2.8b battery deal with SK On

Slate, an electric vehicle (EV) startup founded in 2022 and backed by Amazon founder Jeff Bezos, has chosen South Korean battery manufacturer SK On to supply 20 gigawatt-hours of United States-made batteries for its two-seat pickup trucks.

The agreement, valued at US$2.8 billion, will span from 2026 to 2031.

The Mississippi-based startup plans to produce pickups priced below US$30,000 by emphasizing simplified manufacturing and design.

This strategy differs from Tesla’s Cybertruck, which can reach prices of up to US$100,000.

In addition to its work with Slate, SK On has supplied batteries to other US automakers, including Rivian, which is also backed by Bezos.

🔗 Source: The Korea Times

🧠 Food for thought

1️⃣ Korean battery makers strategically diversify amid US-China tensions and EV market shifts

The choice of SK On by Bezos-backed Slate highlights a broader strategic positioning by Korean battery manufacturers in the evolving EV landscape.

SK On stands out as the only non-Chinese battery maker manufacturing in the US that doesn’t supply Tesla, giving it independence from both geopolitical pressures and Tesla’s market fluctuations1.

This follows a pattern where Korean battery manufacturers have systematically established US production facilities, with SK On beginning mass production in Georgia in 2022, positioning them to benefit from growing demand for US-made batteries1.

The Department of Energy has been actively working to reduce dependence on foreign battery supply chains, creating opportunities for companies with established US manufacturing presence1.

Korean battery makers appear to be hedging their bets in the EV space by supplying multiple manufacturers. For example, Samsung SDI supplies batteries for Rivian’s trucks, while LG Energy Solution provides them for Rivian’s SUVs, and now SK On partners with Slate.

This diversification strategy helps Korean manufacturers maintain stability as Tesla faces challenges, with its market share falling from 53% to 43%2 3.

2️⃣ Affordability emerges as the new competitive battleground in EVs

Slate’s strategy of pricing its pickup truck under $30,000 represents a significant market shift toward affordability in the EV sector.