Samsung SDI said Monday it has clinched a deal to supply electric vehicle batteries for Hyundai Motor Group – the first battery partnership between the two chaebol groups.

Under the deal, Samsung SDI will supply prismatic batteries produced at its Hungary plant for Hyundai EVs made in Europe for seven years, from 2026 through 2032.

Although the exact size of the deal was not disclosed immediately, industry sources predict that Samsung SDI could supply batteries to power up to 500,000 high-performance EVs.

The nickel, manganese and cobalt, or NCM, battery product, dubbed “P6,” is the sixth-generation prismatic battery under development. It boasts high energy density based on 91 percent nickel in cathode and silicon-based anode materials, Samsung SDI said.

A Hyundai Motor official declined to further elaborate, saying, “Specific EV models to be equipped with Samsung-made batteries have not yet been decided.”

The megadeal comes after a meeting between Samsung Electronics Chairman Lee Jae-yong and Hyundai Motor Group Executive Chair Chung Euisun in 2020 at Samsung SDI’s battery plant in South Chungcheong Province.

At the time, Lee invited Chung to the production site and the two leaders reportedly discussed using Samsung SDI batteries for Hyundai and Kia EVs.

The world’s third-largest automaker has used batteries from LG Energy Solution and SK On, which are among the nation’s top three battery makers. It has mostly installed pouch-shaped batteries in its electric cars rather than prismatic ones – a key product for Samsung SDI.

Samsung-made batteries will allow Hyundai to diversify its battery and EV portfolios, the company said.

Samsung SDI and Hyundai also plan to bolster their partnership in developing the next-generation battery platform for electric cars.

“We have taken the first step towards a strategic partnership with the global auto giant Hyundai Motor Group,” said Samsung SDI CEO Choi Yoon-ho in a statement. “With Samsung SDI’s ‘super-gap’ technology and high-quality product, we will further expand our partnership and make our best efforts to strengthen Hyundai’s leadership in the world’s EV markets.”

This is a rare business partnership between the chaebol rivals. Since Samsung ditched its car manufacturing business in the late 1990s, the two groups had maintained friendly ties as they avoided entering the other's key business areas.

Their rivalry seemed to be reviving in the burgeoning mobility sector more recently, but they are increasingly teaming up rather than locking horns. In June this year, they also announced their first-ever automotive partnership on chips.