SK On signs long-term deal to supply ESS battery cells to U.S. firm NeoVolta Power
Quick Look
- SK On has signed a five-year agreement to supply 9 GWh of LFP battery cells to U.S. firm NeoVolta Power starting in 2027, with production at its Georgia plant.
- The deal, valued at approximately $1.09 billion, supports SK On's expansion into the U.S. energy storage market amid a slump in EV batteries.
AI-generated summary
Why It Matters
SK On is expanding into the energy storage system (ESS) battery business to counter a prolonged downturn in the electric vehicle battery market. It is a wholly owned subsidiary of SK Innovation, South Korea's leading refiner.
SEOUL, Aug. 31 (Yonhap) -- South Korean battery maker SK On said Monday it has signed a long-term deal to supply energy storage system (ESS) battery cells to U.S. firm NeoVolta Power, paving the way for its expansion into the growing ESS market.
Under the deal, SK On will supply a combined 9 gigawatt-hours (GWh) of lithium iron phosphate (LFP) battery cells for NeoVolta Power's ESSs over five years starting in 2027, with production to take place at its plant in Georgia, the company said in a press release.
"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," NeoVolta Power President Steve Bond said in the press release.
He said the collaboration is expected to accelerate growth for both companies in the U.S. ESS battery market and help address rising local demand.
The company did not disclose the value of the deal, but market estimates put the contract value at about 1.5 trillion won (US$1.09 billion).
On top of the deal, SK On plans to sign a separate agreement with NeoVolta Power within this year to supply an additional 9 GWh of LFP cells, while the U.S. firm will produce energy storage packs to be purchased by SK On for five years through 2031.
"We view NeoVolta as a strategic partner as we expand our presence in the U.S. ESS battery market. By combining our respective capabilities, we will pursue new commercial opportunities and deliver competitive ESS battery solutions that meet evolving market needs," Choi Dae-jin, head of ESS business at SK On, said.
SK On has expanded into the ESS battery business to offset a prolonged slump in the electric vehicle battery market.
It is the wholly owned battery subsidiary of South Korea's leading refiner SK Innovation Co.
What to Watch
AI outlook โ possibilities, not facts
SK On and NeoVolta Power will sign a separate agreement for additional 9 GWh of LFP cells and pack supply by end of 2026
Likely ยท Within months
Open Questions
- What are the specific terms of the potential additional 9 GWh supply agreement?
- How will the Georgia plant production capacity be scaled to meet the 9 GWh commitment?
- What competitive advantages do LFP batteries offer in the ESS market compared to other chemistries?
