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Saudi Arabia’s SNB Capital has acquired an undisclosed stake worth USD 100 mn in Korean battery manufacturer SK On, according to a statement. The stake was acquired through the Saudi financial institution’s SNB Capital EV Batteries fund.
Where the funds are going: The proceeds from the acquisition will be used to further the Korean company’s expansion plans, the statement said. It will also help boost its production capacity with part of the proceeds channeled towards research and development.
We knew something of the sort was in the works: SK On said in May that SNB Capital was in discussions to invest in the Korean manufacturer through the Korea Investment PE EastBridge Consortium and plans to invest up to USD 144 mn in the company.
A smart investment: SK On is one of the leading EV battery makers globally, supplying batteries to automakers such as Ford, Hyundai, Volkswagen, and Mercedes-Benz from its plants in Asia, Europe, and America, according to the statement.
The Saudis are backing EVs big time: Saudi Arabia has been focusing on the EV industry in recent years as it wagers on its long-term benefit and attempts to diversify its economy. Saudi Arabia’s sovereign wealth fund the Public Investment Fund (PIF) owns a 60.46% stake in EV company Lucid, and provided the majority of the funds for a USD 3 bn stock offering by the US EV maker back in June. Lucid said late last year that 80% of EVs will be made in Saudi Arabia by 2030. The company also plans to produce 155k EVs yearly in Saudi Arabia once full-fledged production capacity is achieved by 2025. The PIF also became Aston Martin’s second-largest shareholder with a c. 17% stake last year as the British luxury maker shifts focus on transitioning to electric and plug-in hybrid models in the coming years.
REMEMBER- Global demand for electric vehicles is set to rise by 35% this year to 14 mn vehicles as the industry continues to pick up pace, according to an International Energy Agency (IEA) report (pdf). The EV share of the total auto market is expected to surge to 18% in 2023, up 4 percentage points from 14% in 2022. The growing shift to EVs could help slash global demand for oil by 5 mn barrels a day by 2030, according to IEA projections.
