SK On wins $1.1 bil. ESS battery deal in US
Summary
SK On said Monday it signed a five-year deal to supply U.S. company NeoVolta Power with battery cells for energy storage systems. The contract covers 9 gigawatt-hours of lithium iron phosphate pouch cells from 2027 to 2031, to be produced in Georgia. Market estimates put the deal at about 1.5 trillion won, or $1.09 billion. The companies also plan an additional 9 GWh agreement that would bring their planned cooperation to 18 GWh.
Key Facts
- The batteries will be produced at SK On’s plant in Georgia.
- NeoVolta Power will make the battery packs, which SK On plans to purchase over five years through 2031.
- SK On has about 100 GWh of battery production capacity in the U.S., including plants in Georgia and Tennessee and a joint plant with Hyundai Motor Group.
Choi Dae-jin, right, head of ESS Business at SK On, poses with Steve Bond, president of NeoVolta Power, in Seoul, Thursday, after signing a deal for SK On to supply battery cells for energy storage systems to the U.S. company. Courtesy of SK On
SK On, the battery-making unit of Korea’s SK Innovation, said Monday it has signed a long-term deal to supply battery cells for energy storage systems (ESS) to U.S. company NeoVolta Power.
Under the five-year deal, SK On will supply a total of 9 gigawatt-hours (GWh) of lithium iron phosphate (LFP) pouch cells from 2027 to 2031. The batteries will be produced at SK On’s plant in Georgia.
The companies did not disclose the value of the deal, but market estimates put it at about 1.5 trillion won ($1.09 billion).
The deal is expected to help SK On secure a stable customer for its ESS batteries in the United States and increase production at its local facilities.
SK On has been expanding into the ESS market as demand for EV batteries has slowed. The company has mainly focused on high-nickel EV batteries but is now adding LFP batteries, which are widely used in ESS due to their lower cost and longer life.
NeoVolta Power selected SK On as a key battery supplier, citing the Korean firm’s battery technology and U.S. production capabilities.
The two companies also plan to expand their partnership. SK On plans to sign another agreement this year to provide an additional 9 GWh of LFP cells. NeoVolta Power will make the battery packs, which SK On plans to purchase over five years through 2031.
The additional deal would bring their total planned cooperation to 18 GWh.
“This partnership strengthens SK On’s position in the U.S. battery ESS (BESS) market and brings together SK On’s U.S.-made LFP battery technology with NeoVolta Power’s growing energy-storage manufacturing capabilities,” said Choi Dae-jin, head of ESS Business at SK On.
“We view NeoVolta Power as a strategic partner as we expand our presence in the U.S. energy-storage market. By combining our respective capabilities, we will pursue new commercial opportunities and deliver competitive BESS solutions that meet evolving market needs.”
Steve Bond, president of NeoVolta Power, said, “SK On’s battery cell technology and U.S. manufacturing capabilities, combined with NeoVolta Power’s energy storage expertise and manufacturing capabilities, provide a strong foundation for this strategic partnership.”
“We expect this collaboration to accelerate growth for both companies in the BESS market and help address rising demand in the U.S.”
SK On has about 100 GWh of battery production capacity in the U.S., including its plants in Georgia and Tennessee and a joint plant with Hyundai Motor Group.
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