Seoul: South Korean battery maker SK On announced a significant agreement to supply energy storage system (ESS) battery cells to U.S. firm NeoVolta Power. This long-term deal marks a strategic move for SK On as it seeks to expand into the burgeoning ESS market.

According to Yonhap News Agency, SK On will provide a total of 9 gigawatt-hours (GWh) of lithium iron phosphate (LFP) battery cells over five years beginning in 2027. The production for these cells will occur at SK On's facility in Georgia. The partnership is poised to leverage SK On's battery cell technology and manufacturing capabilities in the U.S., alongside NeoVolta Power's expertise in energy storage and manufacturing, as highlighted by NeoVolta Power President Steve Bond. He emphasized that the collaboration is set to boost growth for both companies within the U.S. ESS battery market and cater to increasing local demand.

While the financial terms of the agreement were not disclosed, market estimates suggest the deal could be valued at approximately 1.5 trillion won (US$1.09 billion). Additionally, SK On plans to ink a separate agreement with NeoVolta Power later this year for an extra supply of 9 GWh of LFP cells. This agreement will see NeoVolta Power manufacturing energy storage packs that SK On will purchase over the next five years through 2031.

Choi Dae-jin, head of ESS business at SK On, remarked on the strategic nature of the partnership with NeoVolta, highlighting the shared goal of exploring new commercial opportunities and delivering competitive ESS battery solutions tailored to evolving market demands. SK On's venture into the ESS battery sector is part of its strategy to counteract a prolonged downturn in the electric vehicle battery market. As a wholly owned subsidiary of SK Innovation Co., a leading refiner in South Korea, SK On continues to diversify its business operations to adapt to changing industry conditions.