SK IE Technology, an electronics materials maker affiliated with SK Group, said Monday it is supplying battery separators to Chinese battery maker Sunwoda Electronic, paving the way for it to secure a footing in China’s burgeoning electric vehicle market.

The two companies recently signed a memorandum of understanding at Sunwoda’s headquarters in Shenzhen, with senior executives of both companies in attendance.

A battery separator is one of the key components of EV batteries, as it prevents batteries from catching fire during the charging process.

SKIET has supplied battery separators to Sunwoda for electronic devices, but this is the first time for the company to supply the component for EVs to a Chinese battery maker.

Sunwoda’s key clients include Chinese carmakers such as Geely Auto, Dongfeng Automobile and SAIC Auto. In Europe, its key clients are Volvo and Volkswagen.

Under the enhanced partnership, the two companies agreed to work together to upgrade product quality and price competitiveness. Over the long term, they also plan to seek business expansion beyond China.

Established in 1997, Sunwoda is the ninth-largest EV battery maker globally and fifth in China in terms of market share. Last year, the company made its stock debut in Switzerland, with plans to set up a battery plant in Hungary.

SKIET operates local production plants for battery separators in Korea, China and Poland. With the European plant, the company has high expectations about Sunwoda’s potential expansion into Europe.

The SK unit is also seeking to enter the North American market, where it has high hopes for benefiting from the US’ Inflation Reduction Act. The IRA offers hefty incentives for locally produced batteries and related materials.

“We expect to extend our partnership beyond China as Sunwoda seeks expansion into Europe, where we have our own battery separator plant,” said an SKIET official.