Saudi Arabia’s SNB Capital has acquired a stake in South Korean battery manufacturer SK On for $100 million amid a boost in the adoption of electric vehicles globally, according to a media report.
SK On, one of the world’s largest EV battery manufacturers, plans to use the proceeds to fund its expansion and increase its production capacity, the UAE’s National newspaper said in a report quoting a statement from the Saudi National Bank subsidiary
Part of the funds will also be allocated towards research and development, the Natiobal newspaper said.
Commenting on the development, Khaled Al Braikan, head of asset management at SNB Capital, said, “This investment highlights SNB Capital’s unwavering commitment to enriching its clients’ portfolios with niche, quality and geographically diverse investment options, to take part in the sustainable transportation and green energy sector.”
Al Braikan said, “We remain active in our pursuit of unlocking new investment avenues for growth that meet our client’s requirements.”
SK On, a subsidiary of South Korean energy group SK Innovation, is among the top global supplier of battery for electric vehicles to top automobile makers including Ford, Hyundai, Volkswagen, and Mercedes-Benz.
The investment by SNB Capital will allow the company to expand production capacity as well as fund research and development. It currently has production facilities in key markets, such as North America, Europe, and Asia.
Following the concerns over air pollutions, the global electric car sales are set to surge by 35% this year. Government subsidies and the tightening of carbon dioxide emission standards are helping boost, the International Energy Agency said in an April report.
EV focus
Saudi Arabia, the world’s largest energy exporter, is actively pursuing its commitment to reduce carbon emissions by focusing on the electric vehicle (EV) industry. To support this initiative, the country’s sovereign wealth fund, the Public Investment Fund (PIF), has made substantial investments in Lucid, an electric car manufacturer.
In June, Lucid Group announced its intention to raise approximately $3 billion through a stock offering, with a significant portion of the investment expected to come from the PIF. At that time, Lucid revealed that the PIF, holding a majority stake of around 60.5 percent in the company, had agreed to purchase over 265 million shares of Lucid’s common stock in a private placement for approximately $1.8 billion.
The PIF initially invested $1 billion in Lucid as early as 2018, positioning itself as a competitor to Tesla. In February 2021, the PIF, along with US investment firm BlackRock and other investors, injected an additional $2.5 billion into Lucid.
Lucid’s chairman, Andrew Liveris, expressed last year that the company aimed to establish a factory in Saudi Arabia by either 2025 or 2026.
SNB Capital, the largest asset manager in Saudi Arabia, currently manages assets worth 230.4 billion Saudi riyals ($61.42 billion) as of December 2022.