SK Innovation Co., South Korea's leading refiner, said Tuesday it will set up a joint venture with a German auto parts firm to produce next-generation batteries for electric cars.

Under an agreement with Continental AG, SK Innovation will take a 51 percent stake in the joint venture, while the German-based auto parts supplier will hold the rest, the company said.

SK Innovation will supply battery cells to the venture and Continental will contribute its battery management system expertise, said the South Korean company.

SK Innovation said the venture will create synergy in the electric car battery industry by joining its battery technology with Continental's know-how in the auto parts field.

The South Korean firm supplies its batteries to global carmakers including Daimler AG and Hyundai Motor Co.

Shares of SK Innovation closed up 2.25 percent at 159,000 won (US$138) on the Seoul bourse on Tuesday.

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Source: Yonhap News (Jan. 10, 2012)