The agreement was announced at a ceremony held at the Detroit Auto Show, and the completed joint venture is expected to be finalised mid way through 2012. Managed by a team of executives from both companies, it will have headquarters both in Germany and Korea, with Continental supplying its experience of the automotive industry and SK providing its battery cell technology.

Under the agreement, SK and Continental would own 51% and 49% of the joint venture respectively. Both companies said it would help meet the demands of an industry which was due to become increasingly dependent on lithium ion battery packs in the near future.

Dr. Elmar Degenhart, chief executive officer of Continental, commented: ‘The JV is ideally positioned to become a technology leader in providing battery solutions to the automotive industry worldwide because both companies are technology leaders in their areas of expertise, and both share a common strategic perspective for future mobility. Together we will be a powerful team that will work together very effectively in a promising partnership.’

Dr. Jay Koo, CEO of SK Innovation, added: ‘We are pleased to work together in such a key technology for future mobility. With Continental’s automotive expertise and SK’s battery leadership, we have confidence that the JV will become the market leader in battery systems.’

The deal follows a long-term investment programme by Continental within the field of electromobility. It already produces power electronics, electric machines and energy storage devices, and is now developing high voltage lithium ion battery systems. This year, the company will launch its first electric vehicle tyre, the Conti.eContact, worldwide.