HANOVER, GERMANY (July 24, 12:15 p.m. ET) — Auto suppliers Continental AG and SK Innovation have formed a joint venture to develop complete lithium-ion battery systems for the global auto market — a market the companies expect will grow because of increasing environmental demands.
Seoul-based SK will hold a 51 percent stake in the new company, which will be managed from Berlin and have research and development operations in Daejon, South Korea, the companies said in a July 23 news release. The companies did not release the final name of the joint venture.
Production, marketing and sales will be located throughout target global markets and begin with an estimated 200 employees.
Continental, based in Hanover, Germany, already develops and makes battery electronics and battery systems. SK produces battery cells, including separator films. Lithium-ion cells typically are built around a core thermoplastic film. The companies had discussed plans for a venture and now have a signed agreement in hand which calls for the start of business by the end of this year.
While pure electric and electric hybrid vehicles make up just a small percentage of the global market now and some battery companies have struggled for business, the companies said government requirements throughout the world involving carbon dioxide will lead to the need for more carmakers to invest in electric infrastructure.
“The new venture is thus in an ideal position to establish itself as a pioneer in cutting edge technology for battery solutions,” said Jose Avila, a member of Continental's executive board and the head of its powertain division.